China’s trade surplus just keeps growing, as the world prepares for Trump 2.0

China’s trade surplus is hitting record highs, with customs data from the world’s second-largest economy showing that its export-heavy economy is more export-heavy than ever before.

The difference between the value of goods imported and exported in China surged to $785 billion in the first 10 months this year, the highest on record for that period and an increase of almost 16% from 2023, per Bloomberg. That is an imbalance that won’t have gone unnoticed by the newly elected Trump administration, which has previously discussed slapping tariffs of 60% or more on shipments from China during the campaign — indeed, Google searches for the word “tariff” have soared in the last week (chart here).

The case of China’s ballooning trade surplus is partly a short term story of how manufacturers ramped up shipments ahead of the busy season, and some potentially anticipating tariffs in the event of a Trump victory as exports soared in October ahead of economists' expectations. 

But this is really just a continuation of a bigger trend, as China has been increasingly relying on exports to compensate for the weakness of its domestic demand, with imports down 2.3% last month. The slowing economy, weak consumer spending, and China’s middle class becoming increasingly satisfied with domestic alternatives all seem to have contributed towards declining import demand. Brad Setser, a Senior Fellow at the Council on Foreign Relations, summarized in a post on X: “[The] overall story is of an economy that is again growing off exports”.

If — or perhaps more accurately given the rhetoric, when — Trump’s administration do announce more details on planned tariffs, analysts expect Beijing to respond with more stimulus and a sharp depreciation of the renminbi; China’s central bank set its official exchange rate against the dollar at the lowest level in a year on Thursday.