China's trade surplus hits record $1T as exports surge
What's the story
China's trade surplus hit a record high of $992 billion in 2024, the country's customs administration reported. The sharp increase, up 21% from the previous year, is largely due to a massive increase in exports and weak imports. The value of shipments rose steadily throughout the year, exceeding the peak levels recorded during the pandemic in 2022.
Export increase
Exports surge amid weak domestic demand
China's export sector received a major boost in 2024, with total outbound shipments amounting to $3.6 trillion. The surge was primarily attributed to strong international demand and an expected increase in tariffs under Donald Trump's incoming presidency. Consequently, there was a rush to ship goods to the US, with exports amounting to $525 billion for the year.
Record month
December 2024 marks 2nd-highest export month
In December alone, China's exports jumped nearly 11% to $336 billion, making it the second-highest month on record. The figure is only behind December 2021 when Chinese companies witnessed a surge in demand from the pandemic. US-bound exports alone reached a two-year high of nearly $49 billion in the month. Meanwhile, imports witnessed a modest 1% increase last month and an annual rise of just 1.1%.
Future outlook
China's trade future faces potential challenges
China's trade, especially with the US, may be in for a rough ride as Trump has promised to impose higher tariffs on Chinese goods when he assumes office. "Exporters likely anticipated potential trade war to happen in 2025 and pushed delivery to avoid higher tariff down the road," Zhiwei Zhang, Chief Economist at Pinpoint Asset Management, said. This could prompt Chinese firms to shift exports elsewhere, further fuelling global trade tensions.