Trade & Exports

China's external surplus is still near record levels and the two-track trade strategy — deepening non-US market ties while hedging the US truce — is confirmed, not changed, by the latest evidence. SAFE's July 2026 balance-of-payments data put goods and services exports at $424.2bn, imports at $333.0bn and the combined surplus at $91.2bn; the goods balance alone contributed $110.3bn while services remained $19.1bn in deficit ¹. Goods exports remain the sole engine of the external surplus, which is why Beijing continues to push export diversification rather than demand-side rebalancing.

The mechanism is a redirecting of the 'new three' — electric vehicles, lithium batteries and photovoltaics — toward ASEAN, Central Asia and the Global South. MOFCOM reports China remains Kyrgyzstan's largest trading partner, with bilateral trade of $11.7bn in January–July 2026, led by EVs, batteries, photovoltaics and mechanical-electrical goods ². Subnational matchmaking follows the same logic: Shandong and Vietnam's Bac Ninh province held an enterprise conference covering electronics, semiconductors, logistics and agricultural processing ³. At the Central Asia Import-Export Expo in Almaty in late August, Jiangsu firms signed $150mn in intended deals in three days (up 25% year-on-year), and 20 Jiangsu green-equipment companies at the Africa (Kenya) Power, Energy and Water Expo attracted over $30mn in intended cooperation ⁴. These numbers are real but small relative to US market exposure.

On the US track, the détente remains shallow. SCMP reports Chinese business leaders may join Xi Jinping's US trip and that a one-year extension of the Busan trade truce is 'almost certain'; Wang Yi met US ambassador David Perdue to implement leaders' consensus ⁵. Yet the US trade-remedy machine kept running through the period: on August 31 the Federal Register posted final affirmative anti-dumping and countervailing duty determinations on van-type trailers and subassemblies from China ^6,7, following no-shipment findings on hardwood plywood and other scope/process actions. Beijing therefore cannot treat the truce as durable; it is managing risk, not ending it.

The multilateral and provincial tracks are offsetting the US overhang. The Third APEC Senior Officials' Meeting in Dalian reached consensus on practical cooperation in anti-corruption, oceans and fisheries, food security, health and energy, and chair Chen Xu said preparations for the APEC Economic Leaders' Meeting in Shenzhen in November are entering a new stage ⁸. Hainan's free trade port is becoming a concrete import-and-investment gateway: since island-wide customs closure, zero-tariff tariff lines have expanded from 21% to 74%, covering 6,600+ product types, with the processing value-added domestic-sales exemption optimized and the forbidden/restricted list implemented ⁹. Hainan also held a high-tech matchmaking event in Shanghai targeting biomedicine and digital economy ¹⁰, while Gansu's Party committee held a special study session on deep integration into BRI construction and building an 'open strong province' ¹¹. A Qinghai-sourced retrospective on Xi's Global Development Initiative in SCO countries reinforces the diplomatic frame for this diversification, though it adds no new trade data ¹².

The limit is that the surplus itself fuels the backlash. The more China's goods exports grow, the more anti-dumping and countervailing actions accumulate across multiple markets, not just the US. The van-trailer final determinations are a reminder that trade remedies against China remain a permanent feature. The key uncertainty is absorptive capacity: whether ASEAN, Central Asia and Africa can absorb redirected volumes at scale. On the domestic side, Jiangsu's expansion of local trade-in subsidies to embodied-intelligence robots, digital cameras and drones is primarily consumption stimulus, with at best a secondary effect on import demand for high-end components ¹³.

Outlook: continued high export volumes and a large surplus, with the US truce extended but shallow, and growing emphasis on APEC, BRI and free trade ports. The risk is a slow accretion of barriers and insufficient alternative-market absorption, not a near-term collapse in exports. The Almaty and Nairobi numbers show the diversification track is delivering incrementally, but absolute volumes still fall short of replacing the US market.