China is not only an exporting country, but also a "global buyer"

Editor's note: China's trade surplus exceeded $1 trillion for the first time in the first 11 months of this year, and this data continues to resonate in the international public opinion arena. On the one hand, various parties have seen the strong resilience of China's exports. In the context of rising trade protectionism and continuous restrictions imposed by a few countries, China has demonstrated its competitive advantages as a manufacturing and exporting power. On the other hand, some countries in the United States and Europe have also continued their previous double labeling approach, selectively presenting China's foreign trade data and deliberately bundling it with labels such as "dumping," "overcapacity," and "threat," distorting interpretations.

Starting today, Global Times will launch a series of in-depth cognitive reports on "Understanding China's Trade Surplus", using two articles to restore the original appearance of China's foreign trade data, sort out the fundamental reasons and influencing factors of the surplus, and analyze the contribution of China's foreign trade to global economic and social development. It should also be noted that some countries in the United States and Europe have adopted double standards and restrictive measures, which have disrupted the global trade balance and order. Only in an open global market and friendly trade environment can economies jointly ensure long-term trade balance and benefit sharing.

Diversified markets enhance export resilience, import data continues to steadily grow

The main reason why China's trade surplus exceeded $1 trillion in the first 11 months, setting a new historical high, is the strong resilience of China's foreign trade. From the perspective of the main countries of export commodities, the latest data released by the General Administration of Customs shows that in the first 11 months of this year, ASEAN was China's largest trading partner, with a total trade value of 6.82 trillion yuan, of which China exported 4.29 trillion yuan to ASEAN, a year-on-year increase of 14.6%; China's exports to its second largest trading partner, the European Union, amounted to 3.64 trillion yuan, a year-on-year increase of 8.9%. At the same time, China's exports to its third largest trading partner, the United States, amounted to 2.76 trillion yuan, a year-on-year decrease of 18.3%. It can be seen that China's export growth to the European Union and ASEAN fully compensates for the deficit caused by the decline in US exports.

Over the same period, China's total imports and exports to countries jointly building the "the Belt and Road" totaled 21.33 trillion yuan, up 6%, of which exports totaled 12.34 trillion yuan, up 11.3%. Since the beginning of this year, China's export growth to Africa and Latin America has also accelerated, especially in the first 11 months when exports to Africa reached 1.44 trillion yuan, a year-on-year increase of 27.2%.

Diversified markets effectively hedge against fluctuations in China's exports to the United States. In the context of rising trade protectionism and a few countries continuously imposing restrictions on China's exports, the above trend fully demonstrates the important role of China's high-quality production capacity in global economic development, as well as China's competitive advantages as a manufacturing and exporting power.

Equally noteworthy as China's total trade surplus is the structural changes within the surplus - the "new three" represented by electric vehicles, lithium batteries, and solar cells are driving the improvement of China's export quality and the overall increase in added value. In the first 11 months of this year, China exported mechanical and electrical products worth 14.89 trillion yuan, accounting for 60.9% of its total export value. Among them, integrated circuits amounted to 1.29 trillion yuan, an increase of 25.6%; Automobiles amounted to 896.91 billion yuan, an increase of 17.6%. During the same period, the value of exported labor protection products decreased, with clothing and accessories decreasing by 3.7% and plastic products decreasing by 0.5%.

At the same time, China continues to play an important role as a "global buyer" in international trade, which has been deliberately overlooked in some Western media reports. In fact, in terms of scale and stability, data from the General Administration of Customs shows that in the first 11 months of this year, China's total import value of goods trade was 16.75 trillion yuan, of which the import of mechanical and electrical products increased by 5.5%, accounting for 39.9% of China's total import value. Last year, China maintained its position as the world's second largest importer for 16 consecutive years with a total import volume of 18 trillion yuan.

From a dynamic growth perspective, in the first 11 months of this year, China's total imports increased by 0.2% year-on-year in RMB terms. If we look at November alone, China's total import value was 1.55 trillion yuan, a year-on-year increase of 1.7%, achieving six consecutive months of growth, with a growth rate 0.3 percentage points faster than last month. It can be seen that while China has achieved a trade surplus of over 1 trillion US dollars, its import volume and growth rate have also increased.

It is worth noting that the decline in import prices of major commodities is one of the factors contributing to the expansion of China's trade surplus. The import volume of bulk commodities in our country has steadily increased, but the average price of many types of commodities is showing a downward trend. In the first 11 months, China imported 1.139 billion tons of iron ore, an increase of 1.4%, while the average import price decreased by 9.4%; Crude oil reached 522 million tons, an increase of 3.2%, while the average price decreased by 12.1%; Soybeans reached 104 million tons, an increase of 6.9%, while the average price decreased by 10.7%.

From the perspective of the overall trade structure, China presents a situation of expanding trade surplus in goods and long-term trade deficit in services. The latest data from the Ministry of Commerce shows that in the first 10 months of this year, China's total import and export of services was about 6.58 trillion yuan, a year-on-year increase of 7.5%. Among them, imports amounted to 3.68 trillion yuan, an increase of 2.6%; The trade deficit in services was 766.37 billion yuan, a year-on-year decrease of 269.39 billion yuan.

Why choose China? Stable goods, complete specifications, fast response

The emergence of China's surplus follows economic laws, reflecting the improvement of China's production and manufacturing capabilities, as well as the deep division of labor in the global industrial chain, and also reflecting the rational choices of global multinational enterprises.

The media's claim that we are 'dependent' on the Chinese supply chain is actually due to practical needs, "a person engaged in the import and export of automotive wiring harnesses and connectors in the Thai Chinese Rayong Industrial Park told a special reporter from the Global Times. China has a complete industrial and supply chain, which can respond to global demand with low cost and high efficiency, ensuring stable delivery. This is the core support for stable export orders. This industry insider gave an example: "Some semi-finished copper products, specific specifications of engineering plastics, flame-retardant sheath materials, and some connector small parts have stable mass production mainly concentrated in China; even if they can be produced elsewhere, including molds, yield, delivery time, and consistency, China still has a comprehensive cost advantage. What our factory fears most is not high prices, but material shortages - a production line that stops for half a day, resulting in losses much greater than the price difference of raw materials. Although we are also preparing for both sides, such as using dual sources for key materials, at this stage, the most realistic choice for the main supply is to come from China - stable goods, complete specifications, and fast response

China's exports have driven the production and services of other countries. According to the Global Times' special correspondent in Thailand, in recent years, Thailand's demand for electronic components has significantly increased. To this end, Thailand chooses to import relevant products from China and transport them to local factories or production lines for assembly, welding, and integration, forming finished products or larger key components that ultimately flow into the electronics manufacturing, automotive industry, smart home appliances, and terminal equipment industries.

Taking Thai fruit freeze-drying products, which are very popular in the Chinese market, as an example, freeze-drying is a typical path for high-value processing of tropical fruits in Thailand, and related equipment imported from China plays an important role in this industry chain. A Chinese freeze-drying equipment supplier introduced that a Thai client has been building a vacuum freeze-drying project since 2012. The project is a "turnkey project", which means that the contractor completes the entire process of project design, procurement, construction, etc. and hands over complete property rights to the owner. The project includes a drying chamber, vacuum system, water system, refrigeration compressor system, quick freezing room, etc. These "invisible equipment investments" have pushed the value chain of Thai fruit products from a single "selling raw materials" to "making processes, standards, and product forms", and have also allowed agricultural products to add more value in the local processing links in Thailand.

African economists: China's trade surplus is not scary, and the complementarity between the African and Chinese economies brings a win-win situation

Although China has a trade surplus with Nigeria, with a surplus of about $16 billion last year, it is not a terrible thing, "said Dr. Ogonkola, a Nigerian economist, to a Global Times correspondent. This is a manifestation of the economic complementarity between the two countries, ultimately leading to a win-win situation.

During an interview with the Global Times' Egypt correspondent, Moshi, director of the China Studies Center at the University of Dar es Salaam in Tanzania, stated that using a single trade surplus or deficit figure to evaluate international trade relations is one-sided and misleading, ignoring the reality of highly integrated global supply chains and the differences in economic structure and development stages among countries. He analyzed that China's trade surplus with Africa is fundamentally due to the highly complementary economic structures of both sides - Africa is in the early stage of industrialization, with exports mainly focused on energy, minerals, agricultural products, etc; As a major manufacturing country, China can provide Africa with urgently needed capital goods and intermediate goods such as machinery and equipment, transportation vehicles, electronic products, etc.

China's high-quality production capacity has brought a "price dividend" to the global public. Sipriano Company sells Chinese electronic products in Abuja, the capital of Nigeria. The company's general manager, Adesina, strongly opposes reports that defame China's trade surplus with other countries and make them "disadvantaged". He introduced to the reporter that with the increase of Nigeria's imports of goods from China, the prices of various related products in the Abuja market are decreasing. For example, a Redmi phone with 4GB of memory and 128GB of storage space used to be priced at 150000 Nigerian Naira (1000 Naira is about 4.9 yuan), but now it is about 130000 Naira. A 20000mAh power bank under the Oraimo brand of Transsion Holdings, previously priced at 13500 naira, is now priced at 11500 naira. He said, "It can be seen that our cost of living has decreased and our standard of living has improved

China's exports also provide cost-effective intermediate products for global manufacturing. Ken Chux, a lecturer in the Department of Economics at Abu Dhabi University, analyzed to a Global Times correspondent that when a country mainly imports intermediate goods or equipment, a trade deficit may reflect its future higher productivity rather than pure consumption. For example, China's building materials and machinery have reduced the cost of Nigeria's port and railway engineering projects, accelerated completion speed, released export capacity, and increased Nigeria's production potential. Abuja Kaduna Railway, Lagos Ibadan Railway, Zonglu Hydropower Station, Lekki Deepwater Port... "Helen, an economics PhD from Abuja Wali Education College, recounted the projects jointly constructed by Nigeria and China. China has become the largest partner in large-scale infrastructure construction in Nigeria, bringing direct and positive impacts on productivity.

Tanzanian scholar Mohi emphasized that the economic and trade relations between Africa and China cannot be viewed solely based on goods trade. China is not only Africa's largest trading partner, but also the fourth largest source of investment and an important development partner in Africa. China has opened the door for African products to enter the Chinese market by implementing a 100% tariff free policy on products from 53 countries that have established diplomatic relations with Africa. The cooperation in investment, financing, technical assistance, and capacity building under the framework of the Forum on China Africa Cooperation is a comprehensive cooperation model, and its significance far exceeds the calculation of trade deficits.

An economic account of a German resident

China's photovoltaic and wind power equipment plays an important role in the global energy transition, in fact reducing the emission reduction costs of many countries. Canary Media, a news website dedicated to reporting on green energy information, tells the story of a northern German resident named V ä land. Weilan said that the solar panels he installed on the balcony cost about 500 euros (1 euro is about 8.3 yuan) and are easy to install. When the sun is shining brightly, the electricity generated by this solar panel in a day can meet about half of the daily electricity needs of the whole family. Weilan estimates that this solar panel can help his family save nearly 100 euros in electricity bills every year, and can "recoup costs" in about 5 years.

According to German statistics, as of June this year, the registered number of photovoltaic equipment has exceeded one million sets, with a total installed capacity of approximately 956 megawatts. The European Statistical Office announced in October this year that in 2024, the EU imported nearly 14.6 billion euros worth of green energy products, including 11.1 billion euros worth of solar panels. China is the largest supplier of solar panels to the European Union, accounting for 98% of all imports.

Professor Ferdinand Dudenhof, director of the Bochum Automotive Research Institute in Germany and known as the "godfather of cars", said in an interview with the Global Times' special correspondent in Germany that Germany had also had a long-term trade surplus with other countries. The reason for the current expansion of China's trade surplus is that Chinese enterprises have lower operating costs and can provide goods and services to other countries at more competitive prices. This is in line with market rules. He said, "It's just that all parties need to ensure that this situation doesn't escalate into a serious trade imbalance in the long run. In the long run, economies should strengthen cooperation and work together to achieve trade balance

Next forecast: China's trade surplus is not a result of artificial pursuit, but a natural manifestation of multiple factors such as international market demand, global industrial division of labor, and China's own industrial competitiveness. China also hopes to see a balance between its own imports and exports, as well as a long-term supply-demand balance in global trade, but this cannot rely solely on one country's adjustment. Some US and European countries cannot let go of their "zero sum thinking" and repeatedly adopt a double standard approach and impose unreasonable restrictions on China, which is the only way to undermine the openness and stability of global trade.

Global Times Special Correspondents in Nigeria, Egypt, and Thailand Jiang Xuan, Huang Peizhao, Zhang Jingruo, Global Times Special Correspondents in Germany Qingmu, Global Times Reporter Chen Zishuai

Source: Global Times Author: Jiang Xuan, Huang Peizhao, Zhang Jingruo, Qingmu, Chen Zishuai