China’s trade surplus surged significantly to USD 97.44 billion in November 2024, up from USD 69.45 billion in the same month a year earlier. This substantial increase exceeded expectations, surpassing forecasts of USD 95 billion and marking the largest trade surplus since June. The surge was largely driven by an unexpected rise in exports, which grew by 6.7% year-over-year, although this figure fell short of market predictions of an 8.5% increase. The growth, albeit slower compared to October’s 12.7% jump, represents the highest level in 26 months, largely due to manufacturers front-loading orders in anticipation of upcoming tariffs from a new US administration.

Exports Outpace Imports, Boosting Surplus

The surge in exports was a key factor in the overall trade surplus. Sales increased by 6.7% compared to the same period last year, although they eased from the previous month’s robust gains. This was partly driven by proactive measures from manufacturers who aimed to avoid potential tariff hikes from the United States. On the other hand, imports unexpectedly shrank by 3.9%, following a 2.3% decline in October and falling short of expectations for a modest 0.3% rise. This contraction in imports reflects weak domestic demand within China, exacerbating the trade surplus.

Trade Surplus with the US Widens

The trade surplus with the United States continued to widen, reaching USD 34.9 billion in November, up from USD 33.5 billion in October. This ongoing trend highlights the shifting dynamics in China’s trade relations with its largest trading partner. For the first eleven months of 2024, the total trade surplus amounted to USD 884.7 billion, with exports rising by 5.4% to USD 3.24 trillion while imports grew more modestly at 1.2% to USD 2.36 trillion. The widening surplus with the US, reaching USD 326.8 billion during this period, underscores the ongoing tension and challenges in US-China trade relations.

Outlook for China’s Trade Dynamics

Looking ahead, the outlook for China’s trade remains cautiously optimistic despite challenges. The unexpected contraction in imports suggests that domestic demand may continue to be sluggish in the near term, potentially impacting the trade surplus. However, the growth in exports reflects manufacturers’ proactive strategies in response to international trade dynamics. The widening trade surplus with the US also indicates a complex interplay of trade policies and economic strategies between the two countries. As China navigates these external pressures, the focus will be on maintaining export growth while addressing domestic demand concerns to sustain its trade momentum into 2025.