China’s trade surplus is on the way to hitting a new record this year placing it on the path to collide with several largest economies worldwide by increasing inequality in global trade. It is a possibility that this situation could not only escalate problems with some of the major economies but also provoke a response from newly elected US President, Donald Trump.
As observed by Blomberg and their calculations, if Chinese trade continues to work at the same pace as it is until now, the difference between exports and imports can reach almost $1 trillion this year. According to the data released last week, the goods trade surplus reached $785 billion in the initial 10 months which is the highest record for that specific period. Also, there has been a 16% increase as compared to 2023.
In a statement made on X by Brad Setser, a senior official at the Council on Foreign Relations he stated that with the ongoing decline in Chinese export prices, there has been significant growth in export volumes. He further added that the entire story revolves around an economy that is once again on the path of growth paved by growth in exports.
There has been dependency on exports by China to reimburse for the less domestic demand that Beijing has tried to amend by adding stimulus to the economy. The increasingly lopsided situation has prompted a response from a lot of countries and the newly elected Trump administration is expected to impose tariffs that could reduce the flow of exports to the United States.
European and South African countries have already increased their tariff barriers against Chinese products including electric vehicles and steel. Moreover, international companies are also opting to withdraw investments from China, with foreign direct investment liabilities reducing in the initial nine months of the year.
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