China’s Trade Surplus
Surpasses US$1 Trillion as the Dragon Diversifies Away from US, Defying Trade
War Pressures
November outbound shipments increased 5.9
per cent, surpassing forecasts – though exports to US extended sharp decline.
China’s trade surplus has climbed to about US$1.08
trillion for the first 11 months of 2025, surpassing the previous full‑year
record from 2024, mainly because exports have rebounded while import growth
remains weak. This reflects both successful diversification
away from the US market and persistent softness in China’s domestic demand.
Key trade
numbers
·
January–November 2025 trade surplus is roughly
US$1.076–1.08 trillion, already above the 2024 full‑year record of about
US$992 billion.
·
In November 2025, exports grew 5.9 per cent year on
year to about US$330.3 billion, while imports rose 1.9 per cent to about
US$218.7 billion, producing a monthly surplus of around US$111.7 billion.
·
Year to date, exports are up around 5–6 per cent,
while imports are slightly negative, reinforcing the large surplus.
Impact of
the US trade war
·
Exports to the United States have continued to
contract sharply, with November shipments to the US down about 28–29 per cent
year on year after a similarly steep fall in October.
·
Despite this, China’s overall export recovery has
been supported by redirecting goods to other markets such as the EU, Japan,
South Korea and African economies, where exports have been expanding.
Growth
outlook and policy stance
·
Economists note that the strong external sector is
offsetting weak domestic demand, keeping China on track for roughly 5 per cent
real GDP growth in 2025, broadly in line with the government’s target.
·
China’s leadership has signalled plans for a “more
proactive” fiscal policy and “moderately loose” monetary stance in 2026 to
bolster infrastructure investment and support a shift toward stronger domestic
demand.
Sector
and commodity details
·
Rare earth exports rose strongly in November, with
shipment volumes up by over a quarter from October as earlier tensions around
export controls eased. China’s soybean imports in November were lower than in
October, and there is an unconfirmed White House claim that Beijing will buy 12
million tonnes of US soybeans through late 2025 and 25 million tonnes annually
in subsequent years, which Chinese authorities have not formally endorsed.
Implications
for global partners
·
The record surplus and weak import growth are
raising concerns among trading partners, especially in the EU, about demand for
their exports and the risk of renewed trade frictions.
·
Analysts argue that for long‑term balance and
to reduce external tensions, China needs to rely more on domestic consumption
and services rather than persistent large trade surpluses.
China
has reached a new trade surplus milestone, surpassing last year’s record to hit
an all-time high of US$1.076 trillion in the first 11 months of the year – driven
by extensive efforts to diversify export markets and supply chains amid uncertainties
from US President Donald Trump’s tariff war.
The
trade surplus from January to November was higher than the previous full-year record
of US$992.2 billion in 2024. Meanwhile, the trade surplus for the first 10 months
of this year totalled US$964.8 billion.
This
came after the world’s second-largest economy registered a rebound in November’s
exports after declining in October, as overall trade sentiment improved on the heels
of high-level trade talks with Washington – though shipments to the US continued
their steep decline.
Outbound
shipments rose 5.9 per cent year on year to US$330.35 billion, customs data showed
on Monday. This marked an improvement from October’s 1.1 per cent drop and beat
the 3 per cent increase projected by financial data provider Wind.
Imports
reached US$218.67 billion in November, rising 1.9 per cent year on year, accelerating
from October’s 1 per cent growth but missing Wind’s 2.85 per cent forecast. China
posted a trade surplus of US$111.68 billion for the month.
Analysts
said the solid exports would contribute to China’s broader economic expansion, while
sluggish import growth underscored the weak domestic demand that Beijing still needs
to address.
“China’s
trade surplus tops US$1 trillion mark as exports rebounded despite tariffs,” said
Lynn Song, chief economist for Greater China at Dutch investment bank ING, noting
growth of 22.1 per cent over the same period last year.
He
said the ballooning trade surplus would help contribute to stronger growth in 2025.
“The
rebound of export growth in November helps to mitigate the weak domestic demand,”
said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.
“It
seems the economy is on track to deliver around 5 per cent growth this year, in
line with the government’s target. The upcoming Politburo meeting and the central
economic work conference will shed light on the policies in 2026,” he said, adding
that he expects fiscal policy to become more proactive in the first quarter to boost
infrastructure investment.
China’s
Politburo – a major decision-making body of the ruling Communist Party – pledged
on Monday to continue to exert a “more proactive” fiscal policy and “moderately
loose” monetary policy next year as it seeks to promote “effective qualitative improvement
and reasonable quantitative growth”.
The
meeting is usually closely followed by the annual central economic work
conference, which typically sets the tone for policy in the year ahead.
However,
Song from ING said import growth remained sluggish, raising concerns among trading
partners like the EU.
“China’s
pivot to establishing domestic demand as a key driver of growth will take time,
but it’s essential for China to move into the next phase in its economic development.”
Exports
to the US continued to fall last month, declining 28.6 per cent, year on year, compared
with a 25.2 per cent fall in October.
“It’s
likely that November exports have yet to fully reflect the tariff cut, which should
feed through in the coming months,” Song said.
Trade
tensions escalated in April followed by multiple rounds of tariffs and sanctions,
but the world’s two largest economies reached an agreement in late October, reducing
tariffs and delaying export controls.
President
Xi Jinping and US President Donald Trump then held a phone call in late November,
after which Trump announced on social media that he would visit China next April.
Tensions
over rare earths also eased, as Beijing held off on implementing expanded export
controls on the critical minerals.
In
November, China’s rare earth shipments rose 26.5 per cent by volume from October
to 5,493.9 tonnes, customs data showed.
A
more detailed country-by-country breakdown of export categories is expected to be
released by customs on December 20.
As
for soybeans, China imported 8.1 million tonnes in November, a 14.5 per cent decrease
from October.
The
country has mainly relied on Brazil for the crop in recent years. But in late November,
Beijing suspended imports from five Brazilian exporters after inspectors found pesticide-treated
wheat in a shipment bound for the Chinese capital.
Meanwhile,
the White House said Beijing had agreed to buy 12 million tonnes of soybeans through
the rest of 2025, and 25 million tonnes annually over the next three years. That
came after the two countries’ leaders met in South Korea in late October, though
China has not publicly confirmed those figures.
Chip
exports from China decreased 1 per cent month on month in November, after a 15 per
cent drop in October, while imports also declined 6.9 per cent.
This
followed the Nexperia dispute that erupted in September,
when Dutch authorities took control of the firm’s headquarters in the Netherlands.
Tensions
have since eased: the Ministry of Commerce announced in early November that it had
“taken practical measures to exempt compliant exports for civilian purposes”, while
the Hague later suspended its executive order that had allowed the Dutch government
to take control of the company following talks with Chinese officials.
Elsewhere,
China’s exports to the EU, Japan, South Korea and Africa grew by 14.8 per cent,
4.3 per cent, 1.9 per cent and 27.6 per cent, respectively.