The Trillion-Dollar Surplus
After falling year-on-year in October, China’s exports rebounded in November enough that it is almost certain that for 2025, the country that was mired in poverty when you and I were born will become the first nation ever to record a trillion-dollar trade surplus.
The number is just a number, but it’s a big one, and it’s sending shockwaves through boardrooms and national leadership offices across the globe. French president Emmanuel Macron has warned that Europe may have to follow the U.S. in enacting protectionist measures.
A Nice November (for China)
For November, Chinese exports increased 5.9% year-on-year to $330.4 billion. That pushed up total exports for the year to $3.41 trillion. With overall imports at $2.34 trillion, the overall surplus sits at $1.07 trillion. It’s unlikely that China will run a trade deficit in December, meaning that the surplus will hold for full-year 2025. In 2024, China’s trade surplus came in just under a trillion dollars.
Overall, imports rose 1.9% in November to $218.7 billon. Imports from the U.S. declined 19% to $10.1 billon. Imports from the EU ticked up 1.7% to $22 billion. Imports from Vietnam increased 9.8% to $8.8 billion.
How It Started
How China got here is a well-chronicled tale. In the 1980s and 1990s, export-focused policies of communist party leadership and vast resources including a phenomenal domestic labor force and massive internal market attracted capital from across the globe and prompted allies to support China’s accession to the World Trade Organization in 2001.
In this decade, there’s been a protectionist reaction led by the U.S. that has sought to dent Chinese exports. By some measures, it’s succeeded. Chinese exports in November to the U.S. dropped 28.5% year-on-year to $33.8 billion. For some products, China seems on its way out as the world’s dominant supplier. In November, exports of garments, footwear and toys all fell by over 10% year-on-year. Even shipments of mobile phones, a mainstay of the Chinese manufacturing miracle, dropped 12.5% to $14.8 billion.
How It’s Going
But what policymakers are now being forced to reckon with is that China’s export machine is so versatile and sprawling, with so many foreign markets, that it can easily adjust to the world’s largest economy trying to cut it off.
As exports to the U.S. have slowed, those to Europe have rebounded in 2025. Shipments to the European Union increased 14.9% in November to $47.1 billion. Exports to ASEAN nations increased 8.4% to $58.1 billion. Sales to Vietnam jumped 25.8% to $18.3 billon. Exports to Africa increased 27.7% to $20.9 billion.
China has also found new industries to dominate. Exports of motor vehicles in November rose 52.9% to $13.9 billion. Exports of ships increased 46.5% to $5.1 billion. As it’s built up its industrial manufacturing capacity, China has also been making its own market difficult to penetrate. Car imports dropped 41% in November to $1.9 billion. Sales of agricultural products rose 2.4% to $10 billion. Shipments of fertilizers increased 40.2% to $1.4 billion.
How It Ends
With protectionist fervor only expected to increase, China’s leaders know they will have to adjust even more adroitly. The party leadership met on Monday, and President Xi Jinping counseled the stimulation of more domestic demand as “the main driver” for a “a strong domestic market.”
In a note, Morgan Stanley said it expected a surflux of surpluses: “Given its dominant position in high-growth emerging sectors like EVs, batteries, and robotics, we believe China will continue to strengthen its position in global manufacturing and trade.”
Already, it pays to be a commodity supplier to China. Imports of copper, iron ore, petroleum and natural gas all increased while purchases of coal continued to decline. Gas imports almost doubled, rising 95.6% to 11.9 million tons. One exception is rare earth, where imports fell 53.9% to 5,221 tons, and exports rose 24.4% to 5,494 tons.