China Trade Surplus Tops $1 Trillion for First Time on Non-US Growth

• China’s trade surplus surpassed US$1 trillion for the first time as exporters redirected shipments away from the U.S. toward Europe, Australia and Southeast Asia. November exports grew 5.9% year-over-year (YoY), reversing October’s contraction and beating expectations, while imports rose a softer 1.9%. November’s surplus hit US$111.68Bn, well above forecasts.
• Shipments to the U.S. fell 29.0% YoY, reflecting the drag of still-elevated U.S. tariffs averaging 47.5%, even after Washington and Beijing agreed to scale back certain duties. Economists estimate diminished U.S. market access has cut China’s export growth by roughly 2 percentage points (≈0.3% of GDP), with front-loading tactics by Chinese exporters now exhausted.
• China accelerated efforts to diversify export markets following Trump’s 2024 election victory, leveraging global production hubs and strengthened ties with the EU and Southeast Asia. Exports to the EU rose 14.8%, Australia 35.8%, and Southeast Asia 8.2%, driven in part by strong demand for electronics, machinery and semiconductors amid global supply shortages.
• Stronger-than-expected exports supported a firmer yuan as investors awaited direction from key political meetings, including the Politburo and the upcoming Central Economic Work Conference. Policymakers signaled plans to boost domestic demand, which remains weakened by the property downturn, seen in lower copper imports, despite rising rare earth and soybean shipments. Factory activity remained in contraction, reflecting ongoing uncertainty for manufacturers.

(Source: Reuters)