A boom in exports that has pushed China’s trade surplus past $1tn for the first time reveals the extent to which its economy is still overwhelmingly reliant on foreign markets – and the difficulty figures like Donald Trump will have in trying to rebalance global trade.
Data released on Monday shows that in the first 11 months of this year, China’s trade surplus in goods was $1.076tn. The record trade surplus comes even as exports to the US have plummeted, a reflection of the bruising US-China trade war that, despite a recent cooling, has dampened the flow of goods between the world’s two largest economies.
Exports to the US plummeted by nearly a third in November. Speaking on Tuesday, Chinese premier Li Qiang said the “mutually destructive consequences of tariffs have become increasingly evident”.
The fall in exports to the US has led to concerns that China is flooding other parts of the world – especially south-east Asia and Europe – with cheap goods that threaten local industry.
But experts believe that many of the goods bound for south-east Asia ultimately end up in the US, via a practice known as trans-shipment where products are sent via a third country to avoid tariffs. That is because the demand in the US for cheap products has not gone away, and few countries can replicate China’s mammoth ability to produce consumer goods at scale at low prices.
In the first eight months of this year, the US imported $23.1bn in goods from Indonesia, an increase of nearly a third on the same period in 2024. Experts believe this rise is largely down to Chinese goods being redirected via Indonesia.
There have also been increases in imports from Malaysia and the Philippines.
The statistics suggest that the huge tariffs placed by the US and China on each other’s goods has dented bilateral trade but done little to change the overall flow of goods in the global economy.
And as China becomes dominant in the production of hi-tech goods such as electric vehicles and batteries, it is unlikely to lose its place as the world’s factory for the products that are vital to global development. While overall Chinese exports grew by 5.4% this year, certain products – such as semiconductors – saw even larger increases, with a 24.7% jump in exports, according to Chatham House.
Exports to the EU rose sharply in November, by 14.8%, compared with 0.9% in October.
French president Emmanuel Macron said in an interview published over the weekend that on a recent trip to China he had threatened China’s leader, Xi Jinping, with tariffs if there was no action taken to reduce the trade deficit with the EU.
Economists at Morgan Stanley expect China to increase its share of global exports from 15% to 16.5% by 2030.
Zichun Huang, China economist at Capital Economics, agreed, telling Reuters: “We expect China’s exports will remain resilient, with the country continuing to gain global market share next year.”
The data also reveal the extent to which China’s economy is still dependent on exports, despite efforts in Beijing to rebalance the economy at home and boost domestic demand.
Xi chaired a meeting of the Chinese Communist party’s ruling politburo on Monday. According to a readout in state media, the cadres discussed the need to “continuously expand domestic demand” and to make consumption the “main driver” of the economy.
Boosting consumer spending is expected to be a top economic priority in 2026. But policymakers have a big hill to climb. Chinese households are keen on saving money, a trend exacerbated by the pandemic and real estate crash in China that wiped out many people’s savings. Chinese consumption as a share of GDP is about 50%, compared to about 80% in the US.
