New Sensation: The US Trade War Has Been Countered by China's Great Reversal!
A new shock has emerged: China's trade surplus has broken through 1 trillion US dollars, setting a historical record and significantly exceeding the expectations of Western assessment agencies. Importantly, this record occurred in the context of a substantial decline in China's exports to the US. Foreign media have noted that China's exports to the US in the first three quarters of this year fell by 16.9% year-on-year, but it had no impact on China's overall export performance. Washington and many external agencies underestimated the resilience of China's foreign trade: China's exports miraculously increased against the trade war.
The Financial Times stated, "This is the biggest surprise in the November data." According to customs data released on Monday, China's total export value in November increased by 5.9% year-on-year, and in the first 11 months of this year, China's trade surplus measured in US dollars was 1.076 trillion. Economists generally analyze that although the tariff war initiated by Trump this year has brought uncertainty, China's strong promotion of export markets and supply chain diversification has led to a record high trade surplus.
▲ China's import value in November increased by 1.9%. The Wall Street Journal quoted Morgan Stanley economists as saying, "Despite the escalation of trade tensions and the rise of protectionism, China's leading advantage in manufacturing exports will further expand." They predict that by 2030, China's share of global merchandise exports will grow from the current approximately 15% to about 16.5%. Analysts wrote, "Given China's dominant position in high-growth emerging fields such as electric vehicles, batteries, and robotics, we believe China will continue to strengthen its position in global manufacturing and trade.
"However, Bloomberg believes that "this may trigger a strong rebound in the US market, as goods from the world's largest manufacturing country have already flooded the market." Bloomberg's statement may echo the latest National Security Strategy report released by the US, which advocates that the US "will focus on economic competition with China," with the primary goal of its policy towards China being to "establish a mutually beneficial and fair economic relationship with Beijing." This record trade surplus data has also led an increasing number of people to accept the fact that there is an irreplaceable demand for Chinese manufacturing from the US and the world.
Even if some Western political elites try to mobilize a "decoupling" from China through the rhetoric of "de-risking," they are bound to gradually discover that reality continually rejects their fanciful ideas and deceptions, as they absolutely cannot create a supply chain of the same quality as China's anywhere else in the world. The competitiveness of Chinese products cannot be eliminated by trade protectionism; the appeal of being cost-effective is irresistible, and the laws of the market dictate that China's supply chain is unparalleled in today's world.
The US has reduced its trade volume with China through high tariffs, but the base of China-US trade is still very large, and anti-market measures will definitely not outlast market laws in the long run. Washington's desire to consolidate reduced imports from China means that American society will spend more money consuming inferior goods, inevitably leaking from all sides, struggling to cope. Carlos Casanova, chief Asia economist at UBP, told the Financial Times: "US demand has remained 'stable,' and Washington has not restricted the transshipment of goods through third countries, thus China benefits indirectly."
In fact, the US really wants to block third countries from transshipping Chinese goods to the US; they have made various demands, including that the value of Chinese elements in the total value of goods exported to the US must not exceed 30%. However, the US regulations are very difficult to enforce in reality, and they are sometimes forced to relax their demands, which is not at all the US's intention to give Chinese goods a break. While the outside world believes that the record trade surplus is "crucial for China to enter the next stage of economic development," how to use this achievement as a foundation to accelerate the expansion of domestic demand, navigate the uncertainties of international trade, and achieve more stable and robust growth should be one of China's key focus areas.
▲ Macron has just concluded his visit to China. The overall global economy has a supply that exceeds demand; countries with large deficits are all due to weak product competitiveness, but some countries hope to compensate for their lack of competitiveness through protectionism, which will lead to complex situations for surplus countries like China. For example, Macron, who is generally friendly to China and has just finished his visit, complained that the trade imbalance between China and the EU is "growing ever larger," exaggerating that "China has almost stopped importing anything from us," and said, "Now we are caught in the middle (of the US and China), which is a life-and-death issue for European industry."
In fact, China imports more than 30 billion US dollars worth of goods from France each year, but Paris's wish is for China to import as much as possible from France. In today's world, the large scale of the consumer market has become a core resource in international competition and an important lever in shaping geopolitical relations. For example, the long-term deficit of the US looks like the US is taking advantage of the world from a macro perspective, but it has been portrayed by Trump as "the world taking advantage of the US," with Washington continuously using the deficit as a geopolitical tool. Therefore, China's expansion of domestic demand and the enlargement of the import market will further increase our voice in the international arena, constantly weakening the ability of the outside world to economically extort us.
Expanding domestic demand is a process of gradually improving the quality of life for the Chinese people; its significance goes far beyond merely reducing trade friction and increasing China's geopolitical bargaining power. It is also in line with China's ultimate goal of economic development and is an essential path for China's high-quality development. Old Hu's conclusion is that looking around the world, China is the only major country that is strong in foreign trade and also very proactive in expanding domestic demand. We have formed a strong export competitiveness, and our efforts to expand domestic demand are seamlessly integrated with China's national purpose, putting us in a strategically advantageous position. We have every reason to be confident about the future.
