China has crossed a major economic milestone, recording a trade surplus of roughly $1 trillion for the first time. This achievement reflects its entrenched role as a dominant global manufacturing hub, producing a vast range of goods from basic household items to technologically advanced products such as electric vehicles. Data released by the General Administration of Customs indicates that exports for the first 11 months of the year rose to $3.4 trillion, while imports dipped slightly to $2.3 trillion, creating the unprecedented gap.
This surge occurred despite an escalation in tariff pressures initiated earlier in the year by the United States under President Donald Trump. Although China initially absorbed exceptionally high tariff rates before they were later adjusted, its export sector maintained resilience by redirecting shipments to alternative markets and strengthening its ties with regions less affected by US trade measures.
High-Tech Goods at the Heart of Export Growth
China’s export performance regained momentum last month after an unexpected drop in October. Exports expanded nearly 6 percent year-on-year while imports rose less than 2 percent, widening the overall trade surplus sharply. Compared with the same period last year, China’s goods surplus for January through November increased by more than 21 percent.
Much of this surge can be attributed to rapid gains in advanced manufacturing. High-tech exports grew faster than the country’s overall outbound shipments, helping to offset weaknesses in other sectors. Electric vehicles continued their strong upward trajectory, with Chinese automakers increasingly competing with established Japanese and German brands. Total car exports exceeded 6.5 million units this year, an increase of more than one million from the previous year.
Semiconductor shipments also played a critical role. While China still trails US leaders in cutting-edge chip design, it has become a major global supplier of the types of chips used in vehicles, medical devices and consumer electronics. Semiconductor exports rose nearly 25 percent over the period. Meanwhile, the shipbuilding industry benefited from technological upgrades, with export volumes climbing more than 26 percent compared with 2024.
Export Rerouting Helps Offset US Tariffs
Chinese exports to the United States fell sharply, by almost 30 percent, due to high average import duties that still hover around 37 percent. In response, many Chinese firms have restructured their supply chains by shifting manufacturing operations to Southeast Asia, Mexico and parts of Africa. Goods produced or assembled in these regions often enjoy lower tariffs when entering the US.
Trade rerouting has become increasingly evident in recent data. For instance, US imports from Indonesia have surged, and analysts widely attribute this spike to Chinese products being channelled through the country. Vietnam has emerged as another important hub for indirect trade, with Chinese-linked exports handled through its ports continuing to expand.
At the same time, China has strengthened its trade relations with other major partners. Shipments to the European Union grew roughly 15 percent, while exports to Southeast Asian economies increased more than 8 percent, partially compensating for reduced demand from the US market.
Currency Policies Reinforcing Export Competitiveness
Another factor underpinning China’s export success is its relatively weak currency. The renminbi has remained cheap compared with other major currencies due to Beijing’s managed exchange rate system that seeks to maintain stability while ensuring competitiveness. This has made Chinese goods more affordable internationally and raised the cost of imported products, thereby widening the surplus.
Economists have long argued that China’s currency is undervalued, giving exporters a structural advantage. Adjusted for inflation, the renminbi’s real effective exchange rate is currently at its weakest point since 2012, further enhancing China’s competitive position.
Long-Term Industrial Strategy Reaches Its Peak
This record surplus arises from decades of industrial policy aimed at transforming China from an agrarian economy into a global industrial leader. Beginning with low-cost, labour-intensive exports in the 1980s, China steadily advanced into higher-value sectors such as electronics, solar panels and electric vehicles. Electronics remain its largest export category, surpassing $1 trillion in shipments last year.
China also occupies a commanding position in the rare-earth sector, mining most of the world’s supply and processing nearly all of it. These minerals are essential for modern technologies ranging from smartphones to military equipment.
Global Pushback and Future Outlook
China’s expanding dominance has triggered stronger responses from global partners. European governments have begun signalling stricter measures, particularly against Chinese-made electric vehicles. German officials visiting Beijing this week have also raised concerns over pricing distortions and industrial overcapacity.
Despite these tensions, analysts expect China’s export momentum to persist. Morgan Stanley forecasts that China’s share of global goods exports could reach 16.5 percent by 2030. In the near term, the country’s strong trade performance places it firmly on track to meet its annual growth target of around 5 percent, reinforcing the central role of exports in its economic strategy.
