U.S. Top Export Market for China; Trade Surplus at $649.3B

The United States can prevent DJI drones from flying in its airspace and make it impossible for Huawei and ZTE to survive in the American market. Yet, how is it that Americans are wide-eyed to see that they have become China’s largest export market? Despite imposing numerous sanctions, the data on imports from China shows an increase instead of a decrease, leaving Americans puzzled!

Among the three major export markets—the United States, the European Union, and ASEAN—the United States alone has a market share comparable to multiple countries combined, securing its place as China's top export market with $336.9 billion in August! In the first eight months, China achieved a trade surplus exceeding 4 trillion yuan, totaling over 600 billion USD!

Looking at Sino-American trade, it becomes clear that the United States cannot escape from China’s influence! With such a trade record, will the U.S. choose to acknowledge it honestly?

Foreign trade, as a critical component of China’s “external circulation,” made quite a splash in the first eight months of this year! When the export data was released, foreigners were astonished: with a foreign trade total exceeding 40 trillion yuan, of which over 16 trillion was from exports, simple arithmetic shows that imports are around 12 trillion, leading to a trade surplus skyrocketing past 4 trillion!

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However, among the data from these eight months, the U.S. made a significant comeback in August, becoming China’s main import partner, surpassing the EU by $2.7 billion and ASEAN by $4.5 billion, showing a 5% year-on-year increase compared to August of the previous year.

It is undeniable that at this rate of growth, breaking the $350 billion mark for China's monthly exports to the U.S. is not an unattainable goal. Since the escalation of trade tensions, the U.S. has been precarious in its “top dog” position in the Chinese export market. Now that the U.S. has regained its status as China’s largest export destination, there are several points to consider.

While the tariff war seems like the U.S. is putting obstacles in China's way, it has severely impacted American businesses as many of their products heavily rely on imports from China. When tariffs rise, they are left to “suffer in silence,” forced to stock up before the implementation of tariff policies, never knowing when the situation might change again!

Moreover, as the shopping season approaches in Europe and America, these merchants cannot afford to lack inventory, leading to a frenzied procurement drive, which is the primary reason for the surge in the U.S. import market in August. This growth is indeed a bit of a "victory born out of necessity"!

On another note, China’s irreplaceability cannot be overlooked. The U.S. may want to reduce its “dependence” on China by supporting India, even fully replacing it. However, in reality, the U.S. is overestimating India’s capabilities; it still has a long way to go in terms of both production and quality.

However, this is not the main point. The crux of the matter is that behind this wave of explosive foreign trade growth lies a trend that the world cannot ignore: China is quietly transforming and upgrading, no longer the “factory of cheap goods”!

When it comes to Chinese exports, many still cling to the old impression of “low-cost labor manufacturing.” Be it clothes, shoes, or toys—who doesn't recognize that these items from China are inexpensive? However, the core competitive advantage of China’s exports has long transcended these categories.

At this point, one might ask, “So what has become the core of China’s exports?” It is undeniably the “three main pillars” of Chinese foreign trade—ships, chips, and automobiles. These pillars currently support Chinese export strength and may even be called the “new trifecta.”

Starting with shipbuilding, in August alone, Chinese shipyards secured 90% of global orders, leaving South Korea and Japan to compete over the leftovers, with Japan not even able to make ends meet! Furthermore, the shipbuilding orders in China are already booked into 2028, proving the adage: while others are still gazing at the sea, China has already built ships to conquer it!

Next, let’s look at integrated circuits, commonly known as “chips,” which grew by 24% in August, with the total exports in the first eight months nearing a trillion. This figure proves China's robust rise in the global semiconductor sector, and let’s not forget, this is all accomplished despite sanctions from the U.S. and the West.

As for the automotive sector, although traditional fuel vehicles do not favor us much, in the realm of new energy vehicles, BYD is leading the charge. In July, its sales ranked third globally, only trailing Toyota and Volkswagen, and if this momentum continues, BYD may well become the leader!

China's rapid development in the new energy sector, coupled with tight cooperation across the entire industry chain and strong national policy support, has formed an “internal circulation,” allowing the Chinese automotive industry to achieve its present leading position globally. From research and development to production, domestically produced new energy vehicles have completely shed the “low-end and cheap” label.

Whether it’s shipbuilding, the chip industry, or new energy vehicles, China’s foreign trade is shaking off its past “low-end” label and entering a brand new stage of development. With the changes in the global supply chain and the enhancement of China’s technological innovation capabilities, this trend will only gain momentum.

Such a strong rise inevitably makes the European and American markets envious of China. Traditional economic powers like Europe, the U.S., and Japan will certainly seek to preserve their market shares. So, can China secure the “fruits of its victory” in this wave of foreign trade?

Given the big data of foreign trade, we have reason to believe that the world needs China, not just those lower-tier countries; even the U.S. and the West cannot shut the door on China’s “charm”!

Recently, some have speculated that after decades of rapid growth, does the U.S. economy really face a “bankruptcy” crisis? However, a closer look reveals various signs: massive debt, a withering manufacturing sector, and a weak job market, with the Federal Reserve preoccupied with interest rate cuts as a safety net—could this not be seen as a sign of impending crisis?

When it comes to the U.S. manufacturing sector, it truly deserves the title of “glory days are over”—the splendor of American manufacturing has become a thing of the past. This is precisely why the U.S. aims to support India; its own manufacturing sector can no longer hold up.

We all know that manufacturing is the backbone of an economy. If even manufacturing cannot sustain itself, how can the entire economic system develop healthily? Currently, U.S. manufacturing has underperformed for 20 consecutive months, with indices continuously falling.

Moreover, the decline in manufacturing directly results in soaring unemployment rates. July's data shows that the U.S. added only 114,000 jobs while the unemployment rate surged to 4.3%. What does this mean? It indicates that more people are losing their jobs, more are unable to earn wages, leading to decreased consumption and further economic deterioration.

This creates a vicious cycle—the worse it gets, the worse it becomes—which is why it’s said that finance has become the core of the U.S. economy. Once financial turmoil occurs, the consequences could be unimaginable.

In this context, the U.S. is undeniably "dependent" on imports from China, and it is not only the U.S.—European countries and others cannot dismiss China’s “appeal” either!

However, China will not bet on the “goodwill” of Western countries. The most critical point is that China’s “internal circulation” serves as its pillar, ensuring stronger vitality for China.

China's foreign trade has gradually transitioned from a traditional “cheap factory” to high-end manufacturing. Nevertheless, the “second half” of this global competition has only just begun. How to seize the opportunities for innovation and break through technological barriers, and maintain a firm foothold in the global market will determine the future success of Chinese foreign trade.

The future of Chinese foreign trade will be characterized by “Chinese intelligent manufacturing”, and the title of “world's factory” may soon be rightfully transferred to India!