China posts a record $1 trillion trade surplus amid chip IPO mania

China’s annual trade surplus has hit $1.1 trillion for the first time, even with exports to the United States collapsing for the eighth straight month, according to data released by the General Administration of Customs on Monday.

In November alone, China posted a $112 billion surplus, the third-highest ever for a single month, while exports surged by 5.9% year-on-year, bouncing back from the previous month’s dip, while imports edged up 1.9%.

Shipments to the US fell 29% in November, the steepest drop since August. But the hit from the US didn’t drag the overall numbers down because sales to the EU and Africa climbed sharply, helping the country hold up its export momentum.

That allowed China’s factory output to stay high at a time when global protectionism and trade friction are growing. The data puts more pressure on overseas markets already struggling with surging inflows of Chinese goods.

The economic context at home is shaky. Retail sales are crawling through their worst slowdown streak since 2021. Investment just posted a record contraction. Still, the massive trade gap is now supporting GDP growth as the year closes. Despite slower momentum in the final quarter, Beijing is still on track to hit its official 5% growth target for 2025.

Machinery exports lead rebound as consumer goods slow less

The recovery in exports was powered by electronics and machinery, which surged nearly 10% in November, up from a barely noticeable rise the month before. Consumer goods exports were still in decline, but the fall narrowed.

Shipments to the US have been dropping by double digits for eight straight months, highlighting how much demand has shifted elsewhere. Despite tensions, China continues to flood markets with manufactured goods, especially in places where import restrictions are less aggressive. This growing surplus now risks new trade actions from China’s commercial partners, especially in Europe and Africa where volumes have grown fast.

Chip IPOs trigger massive buying frenzy among Chinese investors

While trade dominates globally, China’s retail investors are turning domestic stock listings into a frenzy, especially in the chip sector. Two companies, MetaX Integrated Circuits Shanghai Co. and Beijing Onmicro Electronics Co. , each saw extreme oversubscription levels in their retail tranches last Friday. MetaX’s IPO was 2,986 times oversubscribed, while Onmicro pulled in 2,899 times the available shares.

That came just as Moore Threads Technology Co. surged 425% on debut, feeding speculation it could become a Chinese competitor to Nvidia in artificial intelligence chips. Prior to trading, Moore Threads had already drawn retail bids that were 2,750 times overbooked. Analysts cited tight IPO approvals from regulators as a reason investor demand has been redirected into fewer, more hyped names. The mainland IPO pipeline has slowed because authorities are worried new listings could drain liquidity.

MetaX set its IPO price at 104.66 yuan per share and pulled in 3 trillion yuan in bids, or roughly $424 billion. Onmicro’s price of 83.06 yuan attracted 1.4 trillion yuan in offers. The IPO process allows investors to bid without putting up money up front, so millions flood the applications, hoping to win a few shares with zero downside. Bloomberg used the online winning rates disclosed by both companies to calculate the oversubscription ratios.

MetaX, founded in 2020, is aiming to raise $585.8 million in its Shanghai listing. It builds graphics processing units, targeting the same part of the market as Moore Threads. At its offer price, MetaX trades at a price-to-sales ratio of 56.4, far below the 127.4 peer average from 2024.

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