^{Photo: South China Morning Post}

A Mixed Trade Picture in November

China delivered a sharply mixed trade performance in November, underscoring the widening divide between its shipments to the United States and the rest of the world. According to new customs data, overall exports jumped 5.9 percent year over year, beating market expectations and rebounding from October’s surprise 1.1 percent decline. Economists had forecast only 3.8 percent growth.

Imports, however, rose a weaker-than-expected 1.9 percent, reflecting ongoing weakness in consumer demand driven by a prolonged property downturn, cautious household spending, and fragile labor market sentiment. The increase was still an improvement from the 1 percent rise recorded in October.

As China expands trade with emerging markets and Europe, the country is simultaneously facing sustained pressure in its economic ties with the United States — its largest single-country export destination.

US Shipments Extend Double-Digit Declines

Despite a trade agreement announced in late October between President Xi Jinping and US President Donald Trump, exports to the United States continued to fall sharply. November shipments plunged 28.6 percent, marking the eighth consecutive month of double-digit declines. Imports from the US also fell 19 percent.

Several analysts note that tariffs remain a major obstacle. The Peterson Institute for International Economics estimates that the effective US tariff rate on Chinese goods is still around 47.5 percent, while China imposes roughly 32 percent on American imports. These levels are significantly higher than pre-trade-war rates.

Gary Ng, senior economist at Natixis, says this persistent tariff gap has encouraged Chinese manufacturers to reroute exports through third countries, a trend that “could become a long-term norm.”

So far in 2025, China’s exports to the United States are down 18.9 percent, while imports have dropped 13.2 percent, reinforcing the structural slowdown between the two economies.

Strong Growth in Europe and Southeast Asia

The slump in US-bound goods was offset by vigorous trade with China’s largest regional partners.

Exports to the European Union surged nearly 15 percent, while shipments to the Association of Southeast Asian Nations (ASEAN) climbed more than 8 percent. These two blocs now account for a growing share of China’s export base, helping the country maintain resilience despite geopolitical tensions.

From January to November, total exports increased 5.4 percent compared with the same period in 2024, while imports slipped 0.6 percent. This produced a massive $1.076 trillion trade surplus, up 21.6 percent from a year earlier.

Rare Earth Minerals and Commodity Trends

China’s exports of rare earth minerals — a critical input for electric vehicles, weapon systems, magnets, and renewable technology — accelerated notably. November shipments totaled 5,494 tons, up 24 percent from a year earlier and sharply higher than 4,343.5 tons in October.

Reports indicate that the Ministry of Commerce is working on a new export licensing regime aimed at streamlining rare earth shipments. These materials remain a strategic asset for China, which controls over 60 percent of global rare earth supply and an even larger share of global refining capacity.

Soybean imports also provided insight into China’s commitments under the new trade agreement with Washington. The country imported 8.1 million metric tons of soybeans in November, a 13 percent annual increase but still below October’s level — suggesting a slow start to its pledge to purchase 12 million metric tons of US soybeans by year-end.

Policy Expectations and Economic Outlook

All eyes are now on China’s upcoming Central Economic Work Conference, where policymakers will set the economic tone for 2026, including growth targets and fiscal plans. Official figures will not be released until the March “Two Sessions” meeting.

Economists expect Beijing to maintain its growth target at around 5 percent next year. Goldman Sachs forecasts additional policy support early in 2026, including:

• A one-percentage-point increase in the augmented fiscal deficit
• Around 20 basis points of rate cuts
• Further stimulus for the struggling property sector

Chinese factory activity remains a weak spot. The official PMI contracted for the eighth straight month in November, with new orders still shrinking. A private export-focused survey also showed manufacturing unexpectedly slipping back into contraction.

Still, the recent rebound in export growth may help counterbalance subdued domestic consumption. Zhiwei Zhang of Pinpoint Asset Management argues that this trend keeps China on track to meet its around 5 percent GDP target for 2025.

Strengthening Yuan and Long-Term Sustainability Challenges

China’s currency has appreciated nearly 5 percent since April, with the offshore yuan reaching 7.0669 per dollar at the start of December. A stronger yuan typically suppresses exports by making Chinese goods more expensive abroad, yet November’s performance suggests the currency shift has not materially slowed shipments.

Despite maintaining roughly 5 percent annual GDP growth since 2023, economists continue to warn about China’s heavy reliance on external demand. Weijian Shan, CEO of PAG, argued in a recent op-ed that China must reduce its dependence on exports and prioritize domestic consumption to ensure durable growth.

Shan noted that if the yuan continues to strengthen, the contribution of consumption to GDP could rise from 53 percent today to the 2023 level of 86 percent, as cheaper imports would boost household purchasing power.

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China’s November trade data reveals a familiar contrast: strong export momentum to most global markets and persistent weakness in trade with the United States. While the recent truce between Washington and Beijing has eased some tensions, the structural impact of tariffs, rerouted supply chains, and geopolitical caution continues to weigh heavily on bilateral trade.

At the same time, China’s diversified export growth, rising rare-earth shipments, and a stronger currency highlight the country’s evolving position in global commerce — one defined by resilience, realignment, and long-term economic recalibration.