China’s trade surplus hit 1% of global GDP last year, a new record. This was made possible by reorientating trade toward non-U.S. markets, especially ASEAN but also Europe and Africa. It also involved a shift toward exporting more intermediate and capital goods, allowing China to keep serving U.S. demand indirectly by embedding itself into supply chains elsewhere in the world. We expect the surplus to widen even further this year.
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