In November, China’s trade imbalance surpassed $1 trillion for the first time as manufacturers exported more goods to non-US markets in an effort to evade President Donald Trump’s tariffs. Exports to Europe, Australia, and Southeast Asia increased.
Compared to the same month last year, shipments to the United States decreased by about one-third.
What China’s Non-US Trade Surpassing $1 Trillion Really Means
According to Zichun Huang, a China economist at Capital Economics, the tariff reductions agreed upon during the U.S.-China trade truce did not assist to improve exports to the U.S., even if overall export growth climbed last month. “
Customs data released on Monday revealed that overall Chinese exports increased 5.9% year over year in November, reversing a 1.1% decline in October and exceeding a 3.8% estimate in a Reuters survey.
Compared to a 1.0% increase in October, imports increased by 1.9%. A 3.0% gain was anticipated by economists.
China’s trade surplus increased from $90.07 billion to $111.68 billion in November, the largest since June. That exceeded the $100.2 billion estimate.
For the first time, the trade surplus for the first eleven months of the year exceeded $1 trillion.
Since Trump won the U.S. election in November 2024, China has increased its efforts to diversify its export markets and pursue tighter commercial relations with the European Union and Southeast Asia. Additionally, it has established new industrial hubs for low tariff access by utilizing the worldwide reach of Chinese companies.
In November, Chinese exports to the European Union increased by 14.8% year over year, while shipments to the United States decreased by 29%. Over the same period, the rapidly expanding economies of Southeast Asia imported 8.2% more goods, while shipments to Australia increased by 35.8%.
Despite reports that the two largest economies in the world had decided to reduce some of their tariffs and a number of other steps during Trump and Chinese President Xi Jinping’s meeting in South Korea on October 30, shipments to the United States continued to decline.
The average U.S. tariff on Chinese goods is 47.5%, which is significantly higher than the 40% level that economists claim reduces the profit margins of Chinese exporters.
” Semiconductors and electronic equipment appear to be essential (to increased exports),” said Dan Wang, director of Eurasia Group’s China division.There is a shortage in lower-grade chips and other electronics,
Due to the better-than-expected export figures and investors’ anticipation of policy signals from important year-end meetings, China’s yuan strengthened on Monday.
In an effort to wean the $19 trillion economy off of its reliance on exports, the Politburo, the ruling Communist Party’s top decision-making body, promised on Monday to take action to increase domestic demand.
China’s rare earth exports rose 26.5% month over month in November, the first full month since Xi and Trump agreed to accelerate the supply of essential minerals from the world’s largest refiner.
Chinese buyers, who had refrained from purchasing soybeans from the United States for the majority of the year, raised their purchases from American growers in addition to making large purchases from Latin America, setting up the nation’s soybean imports for a record-breaking year.
Due to a protracted real estate decline, China’s domestic demand is still weak overall.
Imports of unwrought copper, a vital component of industry and construction, decreased as a result of this vulnerability.
Lynn Song, ING’s top economist for Greater China, stated that “China’s pivot to establishing domestic demand as a key driver of growth will take time.”