China's annual trade surplus has reached a historic milestone, exceeding $1.1 trillion for the first time. This achievement comes despite a significant decline in exports to the United States, which have fallen for the eighth consecutive month. The data, released by the General Administration of Customs on Monday, reveals a complex picture of China's global trade performance.
In November alone, China recorded a trade surplus of $112 billion, marking the third-highest single-month surplus on record. Exports experienced a robust rebound, surging by 5.9% year-on-year, recovering from a dip in the previous month. Imports also saw a modest increase, edging up by 1.9%.
The decline in shipments to the US was substantial, falling by 29% in November, the steepest drop observed since August. However, this impact was mitigated by strong growth in sales to the European Union and Africa, which helped maintain China's overall export momentum.
This resilience in exports has allowed China's factory output to remain high, even as global protectionism and trade friction continue to escalate. The latest trade figures place additional pressure on overseas markets that are already contending with a significant influx of Chinese goods.
Domestically, the economic landscape presents a more challenging scenario. Retail sales are experiencing their slowest growth streak since 2021, and investment has seen a record contraction. Nevertheless, the substantial trade surplus is currently providing a crucial support for GDP growth as the year draws to a close. Despite a slowdown in momentum during the final quarter, Beijing remains on track to meet its official economic growth target of 5% for 2025.
Machinery Exports Lead Rebound as Consumer Goods Slow Less
The recovery in China's export performance was primarily driven by the electronics and machinery sectors. Shipments in these categories surged by nearly 10% in November, a significant improvement from the negligible growth seen in the preceding month. While exports of consumer goods continued to decline, the rate of decrease narrowed.
The persistent double-digit decline in shipments to the US over eight consecutive months underscores a significant shift in global demand. Despite ongoing trade tensions, China continues to supply a vast array of manufactured goods to international markets, particularly in regions with less stringent import regulations. This growing trade surplus poses a risk of triggering further trade actions from China's commercial partners, especially in Europe and Africa, where export volumes have recently increased substantially.
Chip IPOs Trigger Massive Buying Frenzy Among Chinese Investors
While international trade captures global attention, China's domestic stock market is witnessing intense activity, particularly within the semiconductor sector. Two recent initial public offerings (IPOs) by MetaX Integrated Circuits Shanghai Co. and Beijing Onmicro Electronics Co. experienced extraordinary levels of oversubscription in their retail tranches last Friday. MetaX's IPO was oversubscribed by a staggering 2,986 times, while Onmicro saw demand exceeding available shares by 2,899 times.
This surge in investor interest followed the impressive debut of Moore Threads Technology Co., whose shares climbed 425% on their first day of trading. This performance has fueled speculation that the company could emerge as a significant Chinese competitor to Nvidia in the artificial intelligence chip market. Even before trading commenced, Moore Threads had attracted retail bids that were 2,750 times overbooked. Analysts attribute the redirection of investor demand towards a smaller number of highly anticipated companies to tight IPO approval processes by regulators. Concerns about new listings potentially draining market liquidity have led to a slowdown in the mainland IPO pipeline.
MetaX set its IPO price at 104.66 yuan per share and received bids totaling 3 trillion yuan, equivalent to approximately $424 billion. Onmicro's offering price of 83.06 yuan attracted bids amounting to 1.4 trillion yuan. The IPO process in China allows investors to place bids without immediate capital outlay, leading to millions of applications in the hope of securing a limited number of shares with minimal risk. Bloomberg calculated these oversubscription ratios based on the online winning rates disclosed by both companies.
MetaX, established in 2020, is seeking to raise $585.8 million through its Shanghai listing. The company focuses on developing graphics processing units (GPUs), targeting the same market segment as Moore Threads. At its offer price, MetaX is trading at a price-to-sales ratio of 56.4, which is considerably lower than the 2024 peer average of 127.4.