China trade surplus tops $1tn for first time amid pivot to counter US lull

"China's annual trade surplus in goods has topped $1 trillion for the first time, with plunging exports to the United States amid a tariff war more than compensated for by shipments to other markets, new data shows. Figures released by China's General Administration of Customs on Monday showed the trade surplus for the first 11 months of the year hit $1.08 trillion in November, as exports climbed 5.9 percent year-on-year that month, reversing a 1.1 percent decline the month prior."

"The leap came despite a continued slump in exports to the US, which fell 28.6 percent to $33.8bn last month, the data showed. Beijing and Washington have been locked in a bitter trade war involving hefty tariffs during the second administration of US President Donald Trump, forcing Chinese exporters to pivot to other markets although the leaders of the world's two largest economies agreed to pause the hostilities during a meeting in South Korea in October."

"China's trade surplus this year has already surpassed last year's level, and we expect it to widen further next year, Zichun Huang of Capital Economics wrote in a note. Huang said the weakness in exports to the US was more than offset by shipments to other markets. Exports were likely to remain resilient, Huang added, due to trade rerouting and rising price competitiveness for Chinese goods, as deflation pushed down its real effective exchange rate."

China recorded a goods trade surplus of $1.08 trillion for the first 11 months of the year as overall exports rose 5.9 percent in November, reversing the previous month's decline. Exports to the United States plunged 28.6 percent to $33.8 billion amid a tariff-driven trade war, while shipments to other markets more than compensated for the US shortfall. Capital Economics projected the surplus to widen further, citing trade rerouting and improved price competitiveness as deflation reduced China's real effective exchange rate. Exports remain crucial amid a property sector debt crisis and weak domestic demand, and the large surplus has prompted warnings of potential Western measures.

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