China’s trade surplus is on track to hit a fresh record this year, increasingly leaving it on a collision course with some of the world’s biggest economies by aggravating an imbalance in global commerce that risks provoking US president-elect Donald Trump.
The difference between Chinese exports and imports is set to reach almost US$1 trillion if it continues to widen at the same pace as it has in the year to date, Bloomberg calculations showed.
The goods trade surplus soared to US$785 billion in the first 10 months of this year, the highest on record for that period and an increase of almost 16 percent from a year earlier, the data showed.
Photo: AFP
“With Chinese export prices still falling, export volume growth was enormous,” Council on Foreign Relations senior fellow Brad Setser wrote on X. “The overall story is of an economy that is again growing off exports.”
China has been relying more on exports to compensate for the weakness of domestic demand that Beijing has only recently tried to redress by injecting stimulus into the economy.
The increasingly lopsided picture has generated pushback from a growing number of countries, and the new Trump administration is likely to impose tariffs that would reduce the flow of exports to the US. Countries from South America to Europe have already raised tariff barriers against Chinese goods such as steel and electric vehicles.
The trade surplus calculated in yuan hit 5.2 percent of nominal GDP in the first nine months of this year, the highest since 2015 and well above the average level for the past decade.
The surplus with the US rose 4.4 percent so far this year from the same period last year. It increased 9.6 percent with the EU and jumped almost 36 percent with the 10 nations in ASEAN, the data showed.
Imbalances are also growing with many other nations. China now exports more goods to almost 170 countries and economies than it buys from them, the most since 2021.
A currency war might be brewing as well.
India’s central bank has said it is ready to let the rupee weaken if China lets the yuan drop to counter US tariffs.
A falling yuan would make Chinese exports cheaper and could further widen the surplus with India, which hit US$85 billion so far this year, 3 percent higher than a year earlier and more than double the level five years ago.
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