For the first time in its history, China’s trade surplus exceeded $1 trillion, reaching $1.076 trillion over the 11 months. This record was set amid a partial détente in relations with the United States – in October, Beijing and Washington agreed to a year-long trade truce. However, US tariffs on Chinese goods remain in place, and certain product categories remain subject to strict tariff restrictions, forcing China to actively restructure its export strategy.
China’s exports to the US plummeted by 29% over the year, but this decline was more than offset by increased shipments to countries in the Global South. Exports to ASEAN countries increased by 6-8%, to Latin America by more than 10%, and to Africa by 20-25%. At the same time, China has effectively built an alternative trade network that is less sensitive to US sanctions and tariff pressure. At the same time, a significant portion of shipments to Southeast Asia and Mexico are used as transit routes: goods undergo minimal processing or relabeling and are then shipped to the US and EU as “non-Chinese products.” Electric vehicles, lithium batteries, solar panels, and microchips remain the main export drivers, with shipments growing by 25% over the past 11 months. Morgan Stanley forecasts that China’s share of global exports will reach 16.5% by 2030.
Against this backdrop, Europe is facing increasing pressure from Chinese manufacturers. In November, China’s exports to the EU unexpectedly increased by 14.8% after almost flatlining the previous month. At the same time, China has virtually replaced imports of European industrial equipment by starting to manufacture machine tools, turbines, and complex industrial systems domestically. Amid the energy crisis and falling demand, Chinese exports are perceived in the EU as an existential threat, pushing Brussels toward protectionism – localization of production, anti-dumping investigations, and tariff hikes. Beijing, for its part, is already demonstrating a willingness to retaliate, including pressure on the agricultural sector and potential restrictions on the supply of critical raw materials, while Chinese container lines are increasingly reorienting their operations to ports in Africa, Latin America, and the Middle East, redrawing the global trade map to suit their own interests.