Chinese trade surplus soars to US$1 trillion ahead of Trump return
Strong demand from overseas has helped provide growth for a domestic economy weighed down by a years-long housing crisis
CHINA’S trade surplus soared to a record last year, driven by strong exports that boosted the economy but may soon be threatened by the incoming Trump administration.
The surplus jumped to an unprecedented US$992 billion in 2024, said the customs administration on Monday (Jan 13), 21 per cent higher than the previous year. That was the result of record exports but also the continued weakness of imports, which have been dragged down by sluggish domestic consumption and falling commodity prices.
“With rising external uncertainty over trade policies of the incoming Trump administration, China’s export growth is likely to face severe challenges this year,” said Kelvin Lam, senior China economist at Pantheon Macroeconomics. “All eyes are on Jan 20 – (Donald) Trump’s first day in office – to see whether he will follow through on his rhetoric and impose tariffs on Canada, Mexico, and China from day one.”
Strong demand from overseas has helped provide growth for a domestic economy weighed down by a years-long housing crisis. Exports accounted for nearly a quarter of the economy’s expansion in 2024, although that support now faces external challenges from the US and other trade partners.
The president-elect’s tariff threats are partly why China’s exports are surging. Trying to get ahead of any new levies, companies in the US are buying more from China in advance.
Exports to the US rose to the highest in more than two years in December, hitting almost US$49 billion and taking the total for the year to US$525 billion.
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The value of shipments to all markets rose almost every month last year, pushing it above the 2022 highs during the pandemic. Exports rose nearly 11 per cent to US$336 billion in December, the second-highest month on record and behind only December 2021, when Chinese firms saw a surge of pandemic-led demand. Outbound shipments for the whole of last year were worth US$3.6 trillion.
“We expect the tariff-driven front-loading will continue to boost exports, similar to the trend seen during the first US-China trade war,” said David Qu, economist for Bloomberg Economics. “That said, a high base in 2024 would limit year-on-year readings.”
But this may be one of the last high points for Chinese trade, at least directly with the US, with Trump promising to impose even higher tariffs on Chinese goods when he takes office next week. Punitive levies may push Chinese firms to divert their exports, flooding other markets with cheap goods and widening trade tensions.
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Efforts to dodge levies have also boosted exports to South-east Asia, with shipments of electronic components to Vietnam soaring since the first trade war. The country overtook Japan as China’s third-largest export destination for the first time last year, driven mostly by a surge in shipments of electronics parts that are assembled and then exported to the US and elsewhere.
Despite shipping record amounts of goods, Chinese exporters have been getting less money for their products, with export prices falling for more than a year as deflation inside China gets worse and pushes down the cost of goods.
As a result, the growth in the volume of Chinese trade has outpaced value, with total export volumes rising 7.3 per cent through November, according to the Ministry of Transport, faster than the 5.4 per cent rise in values.
That can be seen in Shanghai port, which last year became the first anywhere in the world to handle the equivalent of more than 50 million 20-foot shipping containers. The port processed 51.5 million boxes last year, almost 5 per cent more than in 2023 and 19 per cent more than in 2019, the year before the pandemic.
“Outbound shipments are likely to stay resilient in the near-term, supported by further gains in global market share thanks to a weak real effective exchange rate,” said Zichun Huang, China economist at Capital Economics. “Efforts to front-run tariffs are also likely to boost exports in the coming months. But outbound shipments will weaken later this year if Trump follows through on his threat to impose 60 per cent tariffs on all Chinese goods.”
China now sells more goods to more than 165 countries than it buys from them, according to Bloomberg calculations based on government data.
The surplus with the US fell to US$361 billion last year, the lowest in three years, but that was still well above the pre-pandemic levels. The surplus with the 10 South-east Asian nations in Asean soared to a record, and that with the European Union rose to almost US$250 billion.
The growing imbalance has generated pushback from countries other than the US. In 2024, the European Union imposed tariffs up to 45 per cent on Chinese exports of electric vehicles, and some other nations also introduced tariffs to slow imports of steel.
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