China’s trade surplus just crossed US$1 trillion ($1.2 trillion) for the first time in the first 11 months of this year, despite direct shipments to the US plunging 29%. When indirect shipments to the US via third countries are taken into account, the plunge was more like a shallow dive.
China is flooding global markets with cheap exports. This is not an unexpected consequence of US President Donald Trump’s tariff war against all nations. It is also a result that requires some deeper analysis.
First, the hard figures. Exports grew 5.9% y-o-y in November. China is not a country or an economy in retreat. It is not an economy on the brink of collapse. Belated recognition of this appears in the updated National Security Strategy released by the US last week. It portrays China as an economic threat to the US.
