China’s trade surplus with the rest of the world has surpassed $US1 trillion ($1.5 trillion) for the first time – and that in only 11 months. That’s a problem for China, and the world.

China’s exports grew 5.9 per cent in November, and were up 5.4 per cent to $US3.4 trillion for the year to date. Imports, however, grew only 1.9 per cent in November and have actually fallen 0.6 per cent to $US2.3 trillion in the 11 months to the end of November, compared with the same period last year.

Therein lies the problem. The gulf between exports of $US3.4 trillion and imports of $US2.3 trillion – the $US1.08 trillion trade surplus China has produced so far this year – is generating increasing pushback from the rest of the world as other countries see their economies threatened by a Chinese-induced deindustrialisation.

Gantry cranes and shipping containers at the Yangshan Deepwater Port in Shanghai: China’s exports to the rest of the world have swelled in the face of Trump’s trade war.Credit: Bloomberg

In a state visit to China last week, French President Emmanuel Macron threatened China with European Union tariffs if no effort was made to reduce an expanding trade surplus with the EU. China’s exports to the EU have grown by more than 8 per cent this year.

“I tried to explain to the Chinese that their trade surplus is unsustainable because they are killing their own customers, particularly by no longer importing much from us,” he said in an interview at the weekend.

“I told them that if they do not react, we Europeans would be forced in the coming months to take strong measures, following the example of the United States, such as imposing tariffs on Chinese products,” he said.

China has doubled down on........

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