China's Trade Surplus Hits $785 Billion from Jan to Oct
Projected $953 Billion Surplus for the Year if Trend Continues
Bloomberg reported on the 11th (local time) that China’s trade surplus is expected to break an all-time high record this year, raising the possibility of conflicts as it provokes major global economies including the United States.
According to the report, China’s trade surplus from January to October this year reached $785 billion (approximately 1,100 trillion won), a 16% increase compared to the same period last year. This is 12% higher than the previous record of about $703 billion set in 2022 during the same period. Bloomberg predicted that if this trend continues, China’s trade surplus will surpass approximately $953 billion this year.
The United States is one of the countries holding the largest share of China’s trade surplus. From January to October, China’s trade surplus with the U.S. was about $291.5 billion, up 4.4% from the same period last year. This accounts for about 37% of China’s total trade surplus during this period. Surpluses with the European Union (EU) and the Association of Southeast Asian Nations (ASEAN) also increased by 9.6% and 36%, respectively.
Bloomberg explained, “While Chinese companies have increased export performance over the past few years based on government support, import demand has been suppressed due to economic recession, accelerated electrification, and increased domestic substitutes.” It added, “Currently, China is recording trade surpluses with more than 170 countries and economic zones worldwide.”
The intensification of global trade imbalances is expected to provoke stronger backlash from countries. Recently, the EU decided to impose countervailing duties of up to 45.3% on Chinese electric vehicles. Donald Trump, the then President-elect of the United States, had announced plans for a 60% punitive tariff on Chinese imports.
There is also a possibility of a currency war. Sources reported that if China devalues the yuan in response to the U.S. punitive tariffs, the Reserve Bank of India is also preparing to lower the value of the rupee. India adopts a soft peg system, linking the value of the rupee to the yuan. It is interpreted that the central bank’s intervention to support the depreciation of the rupee is due to concerns that the trade deficit with China will worsen. This year, China’s trade surplus with India reached $85 billion, more than double that of five years ago.
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