The silent winner

China has just published its trade numbers for 2025. China has a trade surplus of $1.2Tn. This is incredible of we consider Trump tariffs and all the noise regarding free trade we heard since April 2025. The details: (1) exports to the U.S. down 20%. (2) exports to the EU up 8.4%, and (3) to south east Asia up 13.4%. And here’s the catch: If you look at the charts below, China has been exporting to the U.S. through Vietnam in what it’s been known as Transhipping. From the negotiating standpoint, the US looks strong, but once the details are analyzed, you realize that China is still the world’s factory, stronger than ever. Not only that, but they are negotiating (aka imposing) bilateral trade agreements to be paid in Yuan to avoid going trough the dollar system. Perhaps the only weak point is that on the imports side, which grew a decent 5.7%, they are being left out of the oil market. Now that Venezuela’s oil is under US control, and Iran is close to a regime change, where the descendant of the Sha may return to Teheran, two of the three major oil exporters to China will be US friendly. The third one is Russia, which is not the easiest negotiating partner, and also has ambitions to be a global behemoth. Perhaps that’s why China is pushing for alternative sources of energy, to diminish its dependence on oil. And they are moving very fast in that direction. Out of the 70 nuclear reactors that are being built in the world, 37 are in China, and 80% of the solar panels made in the world, are made in China. Who has the problem with energy dependence then? The western world or China? Germany imports gas from Russia and now has increased its trade deficit with China by 108%. As it usually happens, the winner is silent.

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