In her brilliant FT piece, Welcome to the New Age of Geoeconomics, Gillian Tett captures the essence of today’s trade turmoil — a deep, enduring shift that won’t fade anytime soon. She even cites a former U.S. Treasury official now urging companies to appoint a ‘CGO’ — Chief Geopolitics Officer — to navigate the increasingly blurred lines between commerce and statecraft in a world where governments are rewriting the rules.
Measured over a 12-month rolling period, China recorded a $1.106 trillion trade surplus — its largest ever — underscoring once again that, for China, surplus is what matters.
While imports from the EU dropped 9%, China boosted its exports by 5%.
The result: a familiar outcome — China’s trade surplus with the EU surged to $90 billion, up from $74 billion a year earlier.
Of the $674 billion in trade between Russia and China over the past three years, our estimate is that one-quarter—about $180 billion—is a direct result of Russia’s invasion of Ukraine, a surge in trade that would not have occurred otherwise.
In 2024, China exported to Russia $115 billion
In 2024, China imported $129 billion worth of goods from Russia — but energy and ores alone made up 80% of those imports
Most of the North African countries are central to China’s Belt and Road Initiative, with Egypt joining the BRICS bloc about a year ago. However, heavy trade imbalances persist, as is often the case with countries engaging in trade with China. Given current circumstances, we foresee that these imbalances will increase even further.
China Customs data reveals a significant surge in Henan’s cellphone exports during the first quarter of 2025. Exports to the U.S. saw a robust 38% increase, while shipments to other markets doubled, registering an impressive 100% growth. The U.S. accounted for a quarter of Henan’s cellphone exports. Notably, alongside Apple iPhones assembled at Foxconn, Android brands in Henan are also performing well.
Henan’s policies, including tax breaks and logistics subsidies, have encouraged manufacturers to prioritize exports in early 2025.
China has more than doubled its copper ore imports over the last ten years, with Chile and Peru now supplying 60% of these imports. The average annual growth rate of copper ore prices has been 5% over the same period.
In the first quarter, imports of Iranian crude oil surged 34%, reaching 1.34 million barrels, up from 1 million barrels a year earlier. China, which opposes sanctions on Iran, sourced 14% of its crude oil imports in Q1 from Iranian shipments transshipped in Malaysian waters—making Iran its third-largest crude supplier, ahead of Iraq.
Also in Q1, China’s crude oil imports from Canada increased by nearly 10 million barrels, while imports from the U.S. fell by almost 5 million barrels.
Since Xi took power, China’s trade surplus with India has quadrupled. A single quarter’s surplus now equals all of 2013. Since Covid, it has been rising 20% annually.
A terrifying forecast from the WTO suggests that in the worst-case scenario, Chinese exports to the United States could crash by 77%.
In our view, that would knock 2 percentage points off China’s GDP growth and increase unemployment by an additional 2%, putting around 20 million jobs at risk.
As we closed this edition, China announced a 21% drop in April exports to the U.S. Exports in May are poised to sink even further.
The Chinese government wants to reduce its dependence on soybeans. To non-experts like us, it seemed as if the plan was simply to cut protein intake in pigs by reducing soybean imports. But convinced that it’s not as simple as that—lowering protein intake just by cutting imports—we turned to Todd Thurman, a well-known expert in the swine industry and a longtime China watcher. Here’s what Todd had to say:
“They are reducing soybean meal (SBM) usage in four primary ways.”
First, they are eliminating or reducing “insurance”…extra protein in case they got something wrong and accepting small impacts on performance.
Second, they are aggressively using synthetic amino acids which are cheap and widely available in China.
Third, they are utilizing alternative ingredients where possible including things like rapeseed meal, sunflower meal and pea protein, some of which they can get from Russia pretty cheap right now.
Lastly, they are utilizing processing techniques like extrusion and fermentation to get more out of the soybean meal they have. Extruded SBM is about 5-10% more digestible and fermented is 10%+ more digestible, especially in piglet diets. These techniques can reduce typical inclusion rates by between 5 and 20% depending on phase of production.
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