A boom in exports that has pushed China\u2019s trade surplus past $1tn for the first time reveals the extent to which its economy is still overwhelmingly reliant on foreign markets \u2013 and the difficulty figures like Donald Trump will have in trying to rebalance global trade.<\/p>\n
Data released on Monday shows that in the first 11 months of this year, China\u2019s 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<\/a> that, despite a recent cooling<\/a>, has dampened the flow of goods between the world\u2019s two largest economies.<\/p>\n Exports to the US plummeted by nearly a third in November. Speaking on Tuesday, Chinese premier Li Qiang said the \u201cmutually destructive consequences of tariffs have become increasingly evident\u201d.<\/p>\n The fall in exports to the US has led to concerns that China is flooding other parts of the world \u2013 especially south-east Asia and Europe \u2013 with cheap goods that threaten local industry.<\/p>\n Chinese-made vehicles wait to be loaded on to ships for export in Shanghai. Photograph: Costfoto\/NurPhoto\/Shutterstock<\/p>\n 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\u2019s mammoth ability to produce consumer goods at scale at low prices.<\/p>\n 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.<\/p>\n There have also been increases in imports from Malaysia and the Philippines.<\/p>\n The statistics suggest that the huge tariffs placed by the US and China on each other\u2019s goods has dented bilateral trade but done little to change the overall flow of goods in the global economy.<\/p>\n 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\u2019s factory for the products that are vital to global development. While overall Chinese exports grew by 5.4% this year, certain products \u2013 such as semiconductors<\/a> \u2013 saw even larger increases, with a 24.7% jump in exports, according to Chatham House<\/a>.<\/p>\n Exports to the EU<\/a> rose sharply in November, by 14.8%, compared with 0.9% in October.<\/p>\n French president Emmanuel Macron said in an interview published over the weekend that on a recent trip to China<\/a> he had threatened China\u2019s leader, Xi Jinping, with tariffs if there was no action taken to reduce the trade deficit with the EU.<\/p>\n Economists at Morgan Stanley expect China to increase its share of global exports from 15% to 16.5% by 2030.<\/p>\n