Following an unforeseen decline in the preceding month, China's exports experienced a recovery in November, propelling its trade surplus beyond the $1 trillion mark for the initial time, as indicated by figures published on Monday.
TL;DR
- China's exports recovered in November, pushing its trade surplus past $1 trillion for the first time.
- Exports rose 5.9% year-on-year in November, while imports increased by nearly 2%.
- China is diversifying export destinations to Southeast Asia, Africa, Europe, and Latin America.
- Despite trade tensions, China's share of the global export market is projected to grow.
Exports climbed 5.9% from a year earlier in November while imports rose just under 2%.
According to Monday's released customs figures, exports to the U.S. Experienced a decline of almost 29% compared to the previous year. However, with diminishing trade to the U.S., China is actively broadening its export destinations across Southeast Asia, Africa, Europe, and Latin America.
China's exports experienced a contraction of just over 1% in October. While November's global exports, amounting to $330.3 billion, surpassed projections made by economists. The total for imports during that month reached $218.6 billion.
The trade surplus, valued at approximately $1.08 trillion over the initial 11 months of the current year, represents an all-time peak, exceeding the $992 billion surplus recorded for the entirety of 2024, according to official figures gathered by FactSet.
A year-long trade truce was finalized during discussions between U.S. President Donald Trump and Chinese head of state Xi Jinping in late October in South Korea. The United States has reduced its import duties on China, and Beijing has pledged to cease its export restrictions concerning rare earth elements.
“It’s likely that November exports have yet to fully reflect the tariff cut, which should feed through in the coming months,” ING Bank chief economist for Greater China Lynn Song wrote in a report.
China's manufacturing sector experienced a contraction contracted for an eighth straight month in November, based on an official poll, and financial experts commented that it remained premature to ascertain if a genuine resurgence in international needs had occurred subsequent to the U.S.-China trade ceasefire.
Given that shipments continue to perform well, financial experts typically anticipate China will achieve its objective of approximately 5% yearly expansion for the current year.
Chinese officials detailed a concentration on sophisticated production for the upcoming five-year period after a high-level meeting in October. Additionally, they emphasized the necessity of increasing internal spending, a move that might assist in rectifying trade disparities.
On Monday, the Politburo, the Chinese Communist Party's primary decision-making body, convened under the direction of Xi to deliberate on economic strategies for 2026, as reported by the state-run Xinhua news agency. The agency indicated that China's leadership reaffirmed their commitment to a concentration on “pursuing progress while ensuring stability.”
A readout from Xinhua said China needs to better coordinate its domestic economic work in the face of global “trade struggles.”
Corporations and financiers are closely monitoring China's yearly Central Economic Work Conference, anticipated to occur later this month, which might detail economic objectives for the upcoming year more thoroughly.
“Trade diversification will remain a long-term strategy for China to fight the trade war and manage external exigencies,” said Chi Lo, Global Market Strategist at BNP Paribas Asset Management.
A stable global trade environment is unlikely to last long, as China-U.S. Relations “remain in a stalemate” despite their temporary trade truce, he said.
However, a segment of economists holds the view that China's share of the export market will keep growing in the years ahead.
Morgan Stanley forecasts that by 2030, China's portion of worldwide exports will climb to 16.5%, an increase from its present approximately 15%, driven by its advantage in sophisticated production and rapidly expanding industries like electric cars, automation, and energy storage.
“Despite persistent trade tensions, continued protectionism, and G20 economies taking up active industrial policies, we believe China will gain more share in the global goods export market,” Morgan Stanley Chief Asia Economist Chetan Ahya said in a recent note.
