China’s trade surplus hits record high ahead of Trump return

Good morning. In today’s newsletter:

• China’s trade surplus hits record high

• Air India tries to win back disgruntled customers

• Hong Kong’s iconic ‘tea restaurants’

China’s trade surplus with the rest of the world reached a record of almost $1tn in 2024, official data showed yesterday, just a week before Donald Trump returns to the White House with a vow to impose punitive tariffs on the US’s biggest economic rival.

The $992bn Chinese trade surplus, more than a third of which was with the US, is expected to fuel further tensions with Washington and other trading partners, who have pushed back against a surge of Chinese exports.

Economists said the figures benefited from “front-loading” of exports, as producers tried to ship goods ahead of an expected trade war with the incoming Trump administration.

Chinese producers, meanwhile, have stepped up exports to offset sluggish domestic demand, with households still recovering from a three-year property crash in the world’s second-largest economy. Read how Trump’s threatened tariffs could affect these trends.

• AI race: The US is imposing expansive export controls on chips used for artificial intelligence in an effort to make it harder for China and other adversaries to get access to advanced technology with military applications.

Here’s what else we’re keeping tabs on today:

• Economic data: India publishes monthly wholesale price index inflation rate data.

• India: Space technology company Pixxel is set to launch the country’s first private satellite network aboard a SpaceX rocket from California. (Reuters)

Join the FT in Davos as we provide live, on-the-ground analysis at the World Economic Forum’s annual meeting next week. Register here for updates.

Five more top stories

1. China is building a new class of mobile piers, which could bolster its ability to land an invading force in Taiwan. The six barge-like vessels could help the People’s Liberation Army transport heavy military equipment such as tanks and artillery across mudflats or seawalls on to firm ground. Satellite images show the new mobile piers under construction.

2. EU shipyards are repairing Russian ice-class tankers and offering them dry dock facilities, enabling Moscow to continue moving gas through the Arctic despite western sanctions on its energy sector. Without the maintenance work, Russia’s Yamal LNG plant would struggle to access crucial markets through the winter when northern hemisphere gas prices are at their highest. Here’s why these activities are not sanctioned.

3. US-led mediators have sent the final draft of a ceasefire proposal to Israel and Hamas after a “breakthrough” in talks over a deal to end the war in Gaza and secure the release of hostages. People familiar with the matter said it left the warring parties the closest they have been in months to ending the conflict. “The next 24 hours will be pivotal,” said one diplomat.

4. Cleveland-Cliffs and Nucor are set to launch a joint bid to acquire US Steel just weeks after US President Joe Biden blocked the $15bn takeover of the Pennsylvania-based group by Japan’s Nippon Steel, said people briefed on the matter. Cleveland-Cliffs plans to offer less than $40 a share to buy the company, significantly below the $55 a share that Nippon Steel had agreed to pay last year.

5. Los Angeles was braced for near “hurricane force” winds yesterday, which weather forecasters said could fan the devastating wildfires that have swept across the US’s second-largest city. As firefighters struggled to contain the deadly blazes that continued to rage, the National Weather service warned the winds could create “explosive fire growth”.

News in-depth

The chief executive of Air India has hailed the carrier’s progress in an ambitious turnaround under its Tata Group owner, while acknowledging the challenge of restoring the reputation of the former state-owned national carrier that Indians love to complain about. “There’s a blessing and a curse to being the national carrier,” said Campbell Wilson, the Singapore Airlines veteran hired after Tata bought Air India in a $2.4bn deal in 2022. Here’s how Air India is trying to win back customers.

Premium FT subscribers can sign up here for India Business Briefing, the Indian professional’s must-read newsletter on business and policy. Original analysis from my colleague Veena Venugopal will be delivered to your inbox every Tuesday and Friday.

We’re also reading . . . 

• An out-of-the-box idea for China and Trump: Washington and Beijing should conduct a joint intervention on the renminbi, writes Mark Sobel, a former US Treasury official.

• Zuckerberg’s cravenness: The man in charge of social media platforms used by billions should show some moral courage, writes Jemima Kelly.

• Where incumbents won: The global rebellion against those in power does not extend to developing democracies such as India and Indonesia, writes Ruchir Sharma.

Chart of the day

Chinese corporate profits are set to show a third consecutive year of declines in 2024, with the trend expected to continue into this year as deflationary pressures weigh on the world’s second-largest economy.

Take a break from the news . . . 

Few things symbolise Hong Kong’s fusion of flavours more than its iconic cha chaan tengs — or “tea restaurants” — that serve a mix of western imports alongside Chinese dishes and local inventions. Hongkonger Jason Chau shared a few of his favourites as part of FT Globetrotter’s guide to Hong Kong.