China's trade surplus hits record high, unable to be blocked by Western trade barriers

Data from China Customs shows that foreign trade maintained robust growth in July, with high-tech products serving as the core driver of export expansion. The surge in exports has further widened trade imbalances, triggering concerns among China’s major trading partners.

According to customs data, Chinese exports rose 23.9% year-on-year in July (up 27% in June), measured in U.S. dollars. Amid weak domestic demand and cooling investment, exports remain the key pillar of China’s economic growth, with high-tech products acting as the primary engine. From January to July, exports of high-tech products surged 40.7% year-on-year; automotive exports stood out, with overseas shipments of complete vehicles increasing 50% in July alone. With sluggish domestic consumption, Chinese automakers are aggressively expanding their overseas markets.

A Federal Reserve analyst noted that this export boom is unsettling trading partners, mainly because China’s industrial self-reliance has significantly improved, reducing dependence on imported components. The Fed estimates that China’s trade surplus now exceeds 1% of the combined GDP of all other countries globally—surpassing the peak surplus levels recorded during Germany and Japan’s golden eras of exports.

In July, China’s imports rose 27.5% year-on-year (up 36% in June). Coal imports increased by 20% year-on-year to 42.7 million tons, with import value rising nearly 75%, driven by global energy supply volatility and a surge in domestic electricity demand due to extreme summer heat. Crude oil imports declined 24.3% year-on-year but surged 22% month-on-month to 35.7 million tons, following the temporary recovery of shipping through the Strait of Hormuz in June, which enabled a large volume of low-cost crude to arrive. Imports of electronic components essential for telecommunications equipment also continued rapid growth.

Despite escalating trade barriers, U.S. exports to China rose approximately 15% year-on-year in July, while China’s exports to the U.S. increased 17%. According to the Peterson Institute for International Economics, after the trade war, a significant volume of Chinese goods have been rerouted through third countries such as Vietnam and Mexico before reaching the United States. China’s exports to both nations continued their upward trend in July.

Trade dynamics between China and Europe show clear divergence: In July, China’s exports to the EU grew 16% year-on-year, while imports from the EU declined 1.4%. The widening trade deficit has prompted the EU to implement multiple protectionist measures, with plans to negotiate with China before October to resolve disputes.

China-Russia bilateral trade reached around $25 billion in July, up 31% year-on-year. China exported $12.25 billion to Russia (+35%), while Russia exported $12.75 billion to China (+27%). Volatile Middle Eastern oil supplies have boosted Russian oil exports to China, with the high growth rate largely attributable to the low base effect from last year. Total trade between the two countries from January to July amounted to $159.2 billion, up 26.3% year-on-year.

Original source: toutiao.com/article/1873094591156232/

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