China closed November with a landmark economic achievement, recording an annual trade surplus exceeding $1 trillion for the first time. Official data released on Monday shows that strong export performance in markets outside the United States compensated for sharply declining American demand.
The milestone comes just weeks after Presidents Xi Jinping and Donald Trump agreed to a temporary pause in their long-running trade dispute during a late-October meeting. The truce halted the punitive tariffs and export controls that had rattled global supply chains and triggered a cycle of retaliatory measures.
Despite the easing of tensions, China’s exports to the United States continued to deteriorate in November, plunging 28.6% to $33.8 billion. However, exports to other regions remained robust, lifting overall shipments by 5.9% year-on-year, reversing October’s slight dip and surpassing Bloomberg’s 4% growth forecast.
According to Zichun Huang of Capital Economics, the strength in non-U.S. markets more than compensated for the American decline. “Exports are likely to remain resilient, thanks to trade rerouting and rising price competitiveness as deflation pushes down China’s real effective exchange rate,” AFP quoted him as saying.
With November’s numbers added, China’s cumulative trade surplus for the first 11 months of the year reached $1.08 trillion, already surpassing the full-year total for 2023. Huang expects the surplus to expand further in 2025.
Rising Trade Tensions With Europe
China’s widening trade advantage is expected to increase friction with Western partners. French President Emmanuel Macron, following a recent state visit to Beijing, warned in an interview with Les Echos that Europe may impose tariffs if China fails to narrow its significant trade imbalance with the EU. “Europeans will be forced to take strong measures in the coming months,” Macron said.
Domestic Weakness Persists
The latest data also reflects China’s ongoing domestic struggles. Imports rose just 1.9% in November, below Bloomberg’s forecast of 3%. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, noted that export strength “helps to mitigate the weak domestic demand,” but said economic momentum slowed in the fourth quarter due to persistent weakness in the property sector.
Uncertain Road Ahead for U.S.-China Truce
The tariff truce between Xi and Trump is set to expire late next year, leaving a narrow window for negotiators to establish a more lasting agreement. Analysts remain doubtful about its durability. “There’s no guarantee this uneasy truce will last that long,” ING’s chief economist for Greater China, Lynn Song, cautioned, warning that a softer external demand environment is likely in 2025.
China’s leadership, which has maintained a 5% GDP growth target for 2024, is expected to meet this week to outline the country’s economic strategy for the coming year.
