China on track for record trade surplus despite US export plunge

China’s export growth slowed to the weakest in six months as a slump in shipments to the US deepened again, although a surge in sales to other markets kept Beijing on track for a record trade surplus of over $1.2 trillion this year.

Overall sales abroad rose 4.4% in August from a year earlier to $322 billion, according to a statement from the General Administration of Customs on Monday. That fell short of the median estimate in a Bloomberg survey and was far weaker than a gain of 7.2% in July.

“US tariff policy has continued to drive the diversification of supply chains outside of China while demand for Chinese exports has been diverted to markets including those in Asean such as Vietnam and Thailand,” Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore, said in a report.


The latest figures for August add to the picture of fracturing global trade flows after President Donald Trump’s tariffs of 55% on Chinese exports slashed direct demand from the US. By steering exports to markets outside America as import growth stayed weak, China has racked up a trade surplus of just over $785 billion in the first eight months of the year, almost a third more than during the same period of 2024.

Companies have responded to higher US tariffs by trying to seek out alternative markets or shipping indirectly to the world’s biggest economy. Exports to the US fell 33% in August, the fifth month of double-digit declines. Meanwhile, shipments to the 10-nation Southeast Asian trading bloc rose almost 23%, while exports to the European Union climbed 10% and those to Africa were up 26%.

Still, falling prices and cutthroat competition mean that many companies are in the red despite the rising export revenue, with industrial profits falling almost 2% in the year through July.

Export prices have fallen for almost every month since mid-2023, forcing Chinese firms to ship more goods to maintain the same revenue.

The continued rise in volumes is visible in container data. Shanghai’s port handled a record number of containers last month and all terminals in China processed more than 6.5 million containers for each of the past five weeks. Imports climbed 1.3% in August, leaving a trade surplus of $102 billion. China’s surplus is still on course to handily exceed last year’s record of almost $1 trillion, with overseas sales making up for weaker domestic demand.
However, a gauge of China’s new export orders has been at a multi-month low, boding ill for foreign demand in the period ahead.