Beijing / New York / Delhi / Berlin / Brussels / London / Melbourne / Moscow / Paris / Tokyo
China’s $1.2 Trillion Trade Surplus: Global Markets Flooded with Cheap Exports
1. China’s Record-Breaking Trade Surplus
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China heads toward a $1.2 trillion trade surplus despite 5 months of sky-high US tariffs.
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Surplus already surpassing last year’s ~$1 trillion, on track for new highs in 2025.
2. Export Diversification Beyond the US
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India: Imports hit record $12.5B in Aug, driven by iPhone-related shipments.
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In July, China shipped $1B in chips and billions in phones/parts to India.
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Africa: Exports on track for annual record.
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Southeast Asia: Surpassed pandemic-era peak.
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Latin America: Chinese e-commerce platform Temu’s users rose 143% in 2025.
3. Global Trade Tensions Rising
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Mexico: Considering tariffs up to 50% on Chinese steel, cars, auto parts.
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India: 50 new anti-dumping probe requests in recent weeks.
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Indonesia: Alarm after Chinese jeans & shirts priced at $0.80 per piece went viral.
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Brazil: Threatened tariffs, but gave BYD a tariff-free window to expand.
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South Africa: Opposed punitive tariffs, seeks investment instead.
4. Xi Jinping’s Strategic Play
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Xi promotes BRICS unity against protectionism.
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China warns Mexico of “repercussions” if tariffs are imposed.
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Trump pressuring NATO allies to consider 100% tariffs on Chinese goods over Russia ties.
5. Why Countries Are Hesitant
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Nations already negotiating tariffs with Trump avoid direct clashes with China.
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Some prefer holding tariffs as “bargaining chips” with the US.
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Others fear breaking the global trading system.
6. Domestic Pain for Chinese Industry
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Profits of industrial firms fell 1.7% (Jan–Jul).
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Price cuts to boost exports worsening deflation, at risk of longest spell since 1970s.
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Export push undermines Beijing’s plan to rebalance economy toward consumption.
7. Key Drivers of China’s Export Boom
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Currency advantage: Yuan at weakest real effective rate since Dec 2011.
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Fed rate cuts weaken dollar further, boosting China’s competitiveness.
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Transshipment tactics: Final-stage production shifted to low-tariff countries.
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High-tech demand: Chips, EVs, and smartphones drive bulk of shipments.
8. Electric Vehicles Surge Despite Tariffs
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EV exports worth $19B (Jan–Jul 2025).
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Europe remains top buyer despite EU tariffs in 2024.
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Carmakers like BYD, Nio, Xpeng continue aggressive expansion.
9. “China Shock 2.0” for Global Economies
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Emerging markets fear job losses from cheap Chinese goods.
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Hard to shield industries from China’s massive manufacturing scale.
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Analysts say Chinese exporters absorb tariffs and reroute exports effectively.
10. India as a Beneficiary of Trade Shift
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US-China trade war drives production shifts to India.
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Apple suppliers moving iPhone assembly, but still depend on Chinese-made parts/tools.
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Exports to India on track to break last year’s record.
Disclaimer
This article is a rewritten news summary by The Profit India. It is intended for informational purposes only and should not be considered financial or investment advice.
