China trade surplus tops $1 trillion for first time on non-US growth

Shipments to the United States dropped by close to one-third from the same month a year before.

“The tariff cuts agreed under the U.S.-China trade truce didn’t help to lift shipments to the U.S. last month, but overall export growth rebounded nonetheless,” said Zichun Huang, China economist at Capital Economics. “We expect China’s exports will remain resilient, with the country continuing to gain global market share next year.””The role of trade rerouting in offsetting the drag from U.S. tariffs still appears to be increasing,” she added.

Chinese exports overall grew 5.9% year-on-year in November, customs data on Monday showed, a reversal from October’s 1.1% contraction, and beating a 3.8% forecast in a Reuters poll.

Imports were up 1.9%, compared with a 1.0% uptick in October. Economists had expected a 3.0% increase.China’s trade surplus was $111.68 billion in November, the highest since June and up from $90.07 billion recorded the previous month. That was above a forecast of $100.2 billion.The trade surplus for the 11 months of the year topped $1 trillion for the first time.

China has stepped up efforts to diversify its export markets since Trump won November 2024’s U.S. election, pursuing closer trade ties with Southeast Asia and the European Union. It has also leveraged Chinese firms’ global footprint to establish new production hubs for low tariff access.

Chinese shipments to the United States dropped 29% year-on-year in November, while exports to the European Union grew an annual 14.8%. Shipments to Australia surged 35.8%, and the fast-growing Southeast Asian economies took in 8.2% more goods over the same period.

Tumbling exports to the U.S. came despite news that the world’s two biggest economies had agreed to scale back some of their tariffs and a raft of other measures after Trump and Chinese President Xi Jinping met in South Korea on October 30.

The average U.S. tariff on Chinese goods stands at 47.5%, well above the 40% threshold that economists say erodes Chinese exporters’ profit margins.

“Electronic machinery and semiconductors seem to be key (to higher exports),” said Dan Wang, China director at Eurasia Group. “There is a shortage in lower-grade chips and other electronics, which meant prices jumped, and Chinese companies going global have been importing all kinds of machinery and other inputs from China.”

KEY MEETINGS EYED AMID US-CHINA TRADE UNCERTAINTY

China’s yuan firmed on Monday, off the back of the stronger-than-expected export data, with investors also awaiting policy signals from key year-end meetings.

The Politburo, a top decision-making body of the ruling Communist Party, pledged on Monday to take steps to expand domestic demand, a shift analysts say is crucial for weaning the $19 trillion economy away from reliance on exports.

Top officials are also expected to convene for the annual Central Economic Work Conference in the coming days to set key targets and outline policy priorities for next year.

Economists estimate that diminished access to the U.S. market since Trump returned to the White House has reduced China’s export growth by roughly 2 percentage points, equivalent to around 0.3% of GDP.

October’s unexpected downturn, following an 8.3% surge the month prior, signalled that Chinese exporters’ tactic of front-loading U.S.-bound shipments to beat Trump’s tariffs had run its course.

Although Chinese factory owners reported an improvement in new export orders in November, they were still in contraction, underscoring continued uncertainty for manufacturers as they struggle to replace demand in the absence of U.S. buyers.

An official survey tracking broader factory activity showed that the sector contracted for an eighth consecutive month.

DOMESTIC DEMAND STILL SOFT

China’s rare earth exports jumped 26.5% month-on-month in November, the first full month after Xi and Trump agreed to speed up shipment of the critical minerals from the world’s largest refiner.

The nation’s soybean imports are also poised for their best-ever year, as Chinese buyers, who had shunned U.S. purchases for the majority of this year, stepped up purchases from American growers in addition to large purchases from Latin America.

Overall, China’s domestic demand remains soft due to a prolonged property downturn.

That weakness was seen in a decline in imports of unwrought copper, a key material in construction and manufacturing.

“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,” said Lynn Song, ING’s chief economist for Greater China.