China emerges from trade chaos with record exports and surplus

China ended the first half of 2025 with a record trade surplus of about US$586 billion (S$751 billion) after exports to the US began to stabilise, as factories rode out the tariff roller coaster that upended global commerce. 

Exports rose 5.8 per cent in June from a year earlier to US$325 billion, exceeding the median estimate in a Bloomberg survey of analysts.

Imports rose 1.1 per cent to grow for the first time since February, according to data from the General Administration of Customs on July 14.

Shipments to the US fell 16.1 per cent from a year earlier after slumping by more than 34 per cent in May.

Chinese companies were able to increase their sales in other markets to compensate for the drop to the US, with exports to the 10 South-east Asian nations in the Asean group soaring 17 per cent from a year earlier.

“China’s trade resisted pressure and progressed in the first half of the year,” customs agency deputy head Wang Lingjun said at a press briefing. “But we need to note that unilateralism and protectionism are on the rise globally, and the external environment is becoming more complex, grim and uncertain.”

Diversions of exports away from the US help explain the resilience of Chinese factories, supporting a slowing domestic economy during one of the most turbulent periods in international trade.

The question now is how long the recent strength will last, as the Trump administration looks to curb the transshipment of goods to America through other countries. 

The US last week announced a raft of new levies on trading partners, declaring those tariffs will take effect on Aug 1. It also unveiled a 50 per cent tariff on copper imports and signalled more sectoral levies are in the works. 

While US tariffs on Chinese goods have been cut back to around 55 per cent, down from as high as 145 per cent in early April, Beijing faces mounting risks from Washington’s evolving trade strategy. 

A new agreement with Vietnam, for instance, includes a 20 per cent tariff on Vietnamese exports to the US and a steeper 40 per cent duty on goods deemed to be transshipped, targeting a workaround Chinese exporters have long used to evade American tariffs.

The move could curb demand for Chinese products headed directly to the US, as well as for components used in supply chains across other countries.

Treasury Secretary Scott Bessent said he expected to meet with his Chinese counterpart in the coming weeks to continue discussions. 

“It seems the front loading of exports to the US has not ended,” said Pinpoint Asset Management chief economist Zhang Zhiwei. “The strong exports help to partly offset the weak domestic demand and likely keep gross domestic product growth around the government target of 5 per cent in the second quarter.” BLOOMBERG