China’s General Administration of Customs announced on Monday that exports for 2024 totaled $3.58 trillion, while imports were $2.59 trillion, creating a $990 billion trade surplus that easily surpassed the previous record of $838 billion in 2022.
December 2024 set a one-month record trade surplus of $104.8 billion, which the New York Times (NYT) attributed to a “rush” of exports before President-elect Donald Trump “can take office and start raising tariffs.”
The NYT suggested China’s flood of exports is not making friends among many of its trade partners, and the United States is far from the only nation to create tariff barriers to slow down the torrent of cheap Chinese goods.
“China’s exports of everything from cars to solar panels have been an economic bonanza for the country. Exports have created millions of jobs not just for factory workers, whose inflation-adjusted wages have about doubled in the past decade but also for high-earning engineers, designers and research scientists,” the report noted.
China’s trade picture is an interesting mix of industries where the Communist nation has become utterly dominant around the world, like solar panels, plus some goods that China can now produce for itself instead of importing on a massive scale, like commercial jets, and a few where China still has not managed to become self-sufficient, most notably energy other than solar power.
Automobiles are an interesting case study in China’s manufacturing revolution as the country went from importing most of its vehicles to becoming the world’s largest exporter of cars in about two decades.
Critics charge China with distorting global auto sales through “overcapacity,” meaning China produces far more cheap autos than it needs, thanks to declining local consumer demand in a weak economy. Overcapacity, plus massive government subsidies, would make it easy for China’s electric vehicle (EV) makers to overwhelm the domestic car industry in any market they can gain access to, including the United States.
The record-breaking exports from 2024 might not be good news for China because eventually its companies will begin going bankrupt from slashed prices and bulging inventories, especially if other countries keep throwing up tariff barriers.
China’s auto industry, at the very least, appears to have peaked – and since the auto industry in other key markets is politically powerful, and those industries spent gigantic sums of money plus vast government subsidies to create their own EV markets, automobiles are the tariff barrier most likely to hold firm.
The China Association of Automobile Manufacturers (CAAM) released data on Monday that projected Chinese vehicle export growth to slow from 19.3 percent in 2024 to just 5.8 percent in 2025, while the regime in Beijing struggles to jump-start domestic vehicle demand with new subsidies and incentives.
In fact, CAAM’s data showed 2024 was actually a rough year for Chinese automakers as EV sales rose by 80.9 percent in 2023, then plunged to 19.3 percent growth last year. Chinese companies are pushing more hybrid vehicles instead of pure EVs in a bid to get around European tariffs, so hybrid vehicle exports soared even as EV exports plummeted.
Trade analysts said China’s exports in other industries could have a solid first quarter in 2025 but then slide dramatically as more tariffs are raised in the U.S. and elsewhere.
“China’s deflationary pressure in the manufacturing sector may continue to fuel more geopolitical tensions,” Natixis senior economist Gary Ng told CNBC on Sunday.
One big exception to this atmosphere of tension is China’s export of materials and equipment used by manufacturers in other countries. China’s steel exports boomed last year, hitting a nine-year high, and the manufacturing sector seems less likely than retail markets to complain about a tidal wave of cheap Chinese products produced through overcapacity.
Ng predicted “weak consumer sentiment, uneven recovery in real estate and tepid growth in local government infrastructure projects” would keep China’s domestic demand low in 2025.
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