Trade Surge

China’s Trade Surplus Smashes $1 Trillion

China’s annual exports crossed the trillion-dollar mark for the first time. The new record was set in just 11 months, with December’s data still to come.

• Exports grew 5.9% year-on-year in November, reversing October’s 1.1% contraction and beating forecasts of 3.8%.
• Imports rose 1.9%, slightly above October’s 1.0% uptick but below expectations of 3.0%.
• The monthly trade surplus hit $112 billion, the highest since June.

Together, these figures underscore how China’s exporters are powering ahead despite US tariffs. The rest of the world is more than making up for the dip in the US.

US Tariffs Bite, But China Reroutes

The US–China trade dispute is reshaping the global economy, even though the rhetoric between the countries has recently softened. The White House tariffs on Chinese goods still average 47.5%, forcing many Chinese businesses to look for market opportunities elsewhere.

• November shipments to the US plunged 29% year‑on‑year
• Exports to the EU grew nearly 15%
• Shipments to Australia soared 36%
• Southeast Asia saw an 8% jump

Chinese firms also shifted assembly to hubs in Mexico and Africa, allowing some goods to reach the US with lower duties. Tariffs slowed direct flows but didn’t stop the surplus — they simply redirected it.

Why Keep Score of Trade Balance?

The trade balance is the scoreboard of exports minus imports. A surplus means selling more than you buy, like China today. A deficit means buying more than you sell, like the US on most years.

China’s full-year surplus is set to equal about 6–7% of China’s $19 trillion economy, rivaling America’s dominance after WWII when other exporters were in ruins.

Surpluses can fuel jobs and innovation, and can be used for geopolitical clout. But they can also reveal weak domestic demand.

Weak Yuan, Strong Exports

China’s trade boom has been turbocharged by a soft currency. China’s currency renminbi (or yuan) has weakened against the euro and the dollar in recent years, making Chinese goods cheaper abroad while imports into China remain costly.

That tilt helps Chinese exporters win market share in Europe and Asia, but it leaves domestic households paying more for foreign products like wine, cosmetics, or gasoline.

The yuan is valued under a managed float, with the PBOC (the Chinese central bank) setting a daily midpoint and stepping in to curb big moves.

Surplus Sparks Debate at Home and Abroad

China’s trillion‑dollar surplus is drawing scrutiny. IMF officials are in Beijing this week to review currency and trade policies, while some economists at home and abroad argue that narrowing the surplus could boost household demand. A stronger yuan would make imports cheaper, but risk slowing factory growth and job creation.

The debate shows how trade balances aren’t just numbers. Fiscal and monetary policy choices, along with global factors, determine whether growth leans on exports or consumers.