China’s towering annual trade surplus surpassed $1 trillion for the first time last month, data showed Monday, as a sharp drop in shipments to the United States was offset by surging exports to other major markets.Presidents Xi Jinping and Donald Trump reached a tentative truce to their fierce trade war when they met in late October, agreeing a pause to painful measures that included lofty tit-for-tat tariffs.Exports have served as a key economic lifeline for China as trade and relations with the United States and others have fluctuated in recent years.That has helped temper a prolonged debt crisis in the country’s vast property sector and sluggish domestic spending, which have weighed on growth and are among the most pressing issues facing Beijing.Exports climbed 5.9 percent year-on-year in November, reversing the slight decline recorded in October, the General Administration of Customs said.The reading was also above a Bloomberg forecast of four percent growth.The jump came despite a continued downturn in shipments to the United States, which sank 28.6 percent to $33.8 billion in November, the data showed.”Weakness in exports to the United States was more than offset by shipments to other markets,” Zichun Huang of Capital Economics wrote in a note.”Exports are likely to remain resilient, thanks to trade rerouting and rising price competitiveness as deflation pushes down China’s real effective exchange rate,” Huang said.The surge in shipments last month added to the country’s ballooning annual trade surplus for the first 11 months of the year, which the Customs data showed hit $1.08 trillion in November.”China’s trade surplus this year has already surpassed last year’s level, and we expect it to widen further next year,” Huang wrote.But the imbalance has long been a sticking point for major Western trading partners.French President Emmanuel Macron threatened in remarks published Sunday to impose tariffs on China if Beijing fails to reduce its massive trade surplus with the European Union.Macron — who concluded a state visit to China last week — warned in business daily Les Echos that “Europeans will be forced to take strong measures in the coming months”.In a further sign of China’s weak domestic consumption, the data showed Monday that imports rose 1.9 percent on-year in November — slower than the three percent increase predicted by Bloomberg.”The rebound of export growth in November helps to mitigate the weak domestic demand,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note.”The economic momentum slowed in the fourth quarter partly driven by the continued weakness in the property sector,” he said.Xi and Trump agreed at the October meeting in South Korea to scale back sky-high tariffs on each other’s goods and blistering export controls that had sent shockwaves across global industries.The detente is due to expire late next year, allowing time for officials to reach a permanent deal — though experts warn such a breakthrough will be challenging.”There’s no guarantee this uneasy truce will last that long,” Lynn Song, ING chief economist for Greater China, said last week.”A lot needs to go right for the agreement to hold for the full year,” he wrote, adding that “it seems prudent to expect a softer external demand backdrop for next year.”China’s leaders — who are targeting overall growth this year of five percent — are expected to convene a key meeting this week focused on economic planning.

Hong Kong’s leader said Monday that the fresh crop of lawmakers who will take office after the “patriots only” legislative election will drive institutional reform, following the city’s deadliest fire in decades.The Chinese finance hub on Sunday held its second contest under electoral rules that Beijing imposed in 2021, which slashed directly elected seats and tightened political vetting for candidates.Some 1.32 million of the 4.14 million registered voters cast ballots, slightly fewer than in the 2021 race. However, the turnout rate edged up from last time’s record-low 30.2 percent to 31.9 percent thanks to a smaller population of voters.A government publicity blitz for the election was halted in late November after a blaze tore through the housing blocks of Wang Fuk Court in northern Hong Kong, killing at least 159 people and displacing thousands.City leader John Lee said Monday those who voted had shown “support for the government’s commitment to recovery and reform following the tragedy, and for electing capable and committed (lawmakers) to drive institutional reform”.The new legislators, expected to start work early next year, will “join hands with the (government) to undertake support and recovery work following the tragedy”, Lee added.A spokesperson for Beijing’s office overseeing Hong Kong affairs hailed the outcome and said the turnout “significantly exceeded” the previous iteration.”The successful conclusion of this election fully reflects the collaborative, determined and united ‘Lion Rock’ spirit of Hong Kong society,” the Hong Kong and Macao Work Office said in a statement.Newcomers make up just over 40 percent of the winners, which included Olympic champion fencer-turned-tourism sector representative Vivian Kong.- Beijing-imposed overhaul -Legislature elections in Hong Kong used to feature boisterous clashes between pro-Beijing and pro-democracy camps, with the latter often winning around 60 percent of the popular vote.But Beijing overhauled Hong Kong’s electoral system in 2021 after the city saw huge and sometimes violent pro-democracy protests two years before.Sunday’s race featured 161 government-vetted candidates and was once again devoid of the two largest pro-democracy parties: the Civic Party disbanded in 2023 and the Democratic Party, which is winding down.Political scientist John Burns said the vote reflects “continuing polarisation” and “the disappointment and anger of citizens on seeing the alleged negligence of the government” over the fire.”The election raises questions about the legitimacy of the post-2021 political system and the stability of Hong Kong,” said Burns, an emeritus professor at the University of Hong Kong.As of Sunday, Hong Kong’s anti-corruption watchdog had arrested a total of 11 people for telling others not to vote or to cast invalid ballots.Authorities have also warned against crimes that “exploit the tragedy” and arrested a 71-year-old man for sedition, following earlier reports of three fire-related sedition arrests.China’s national security agency in Hong Kong summoned representatives from international media, including AFP, for a meeting on Saturday to warn them “not cross the legal red line” during their coverage of the fire and the election.

Asian equities drifted Monday as investors gear up for an expected US interest rate cut this week, with debate centring on the likelihood the Federal Reserve will continue easing monetary policy further into the new year.The reduction has been well baked into traders’ plans following a string of comments from key decision-makers since last month and data indicating the labour market continues to deteriorate.However, with the latest round of inflation figures suggesting there is plenty of work to do to get prices under control, and confidence among consumers softening, there are worries the central bank might not have room to keep cutting.The latest, and delayed, reading on September personal consumption expenditure (PCE) — the Fed’s preferred gauge of inflation — came in slightly above August, though the core reading was unchanged.The data did little to move the needle on rate expectations but showed that it remains stubbornly above officials’ target.Economists at Bank of America said that a blackout period for Fed members commenting on policy would end on Thursday and “we’ll be on the lookout for what potential dissenters have to say”.With the backlog from the government shutdown being cleared, the BoA team pointed out that there were several key releases between Wednesday’s decision and the next meeting in January.That includes three non-farm payrolls prints, two unemployment reports, two inflation releases and retail sales for October, November and maybe December. “We look for two or three substantive changes in the (policy board) statement. The description of labour market conditions is likely to omit the language that the unemployment rate ‘remained low’, to reflect the 32-basis-point uptick over the last three months,” they wrote.  “The forward guidance language might also be tweaked to indicate that the bar for additional cuts has risen. This would be a nod to the hawks.”Markets are looking for a hawkish cut, in the sense that they’re pricing under eight basis points of cuts in January and less than a full 25 points in the first three meetings of 2026 (after which Jerome Powell’s term as Chair ends).”All three main indexes on Wall Street ended last week on a positive note, but Asia struggled to match.Tokyo was marginally lower while Hong Kong, Sydney and Singapore were in the red. Shanghai, Seoul, Wellington and Taipei rose.Traders are also keeping a wary eye on China-Japan tensions following news that Tokyo summoned Beijing’s ambassador after Chinese military aircraft locked radar onto Japanese jets.Relations have chilled since Japan’s Prime Minister Sanae Takaichi suggested last month that Japan would intervene militarily in any Chinese attack on Taiwan.Tokyo said J-15 jets from China’s Liaoning aircraft carrier on Saturday twice locked radar on Japanese aircraft in international waters near Okinawa.China’s navy said Tokyo’s claim was “completely inconsistent with the facts” and told Japan to “immediately stop slandering and smearing”.- Key figures at around 0230 GMT -Tokyo – Nikkei 225: FLAT at 50,473.84 (break) Hong Kong – Hang Seng Index: DOWN 0.6 percent at 25,919.77Shanghai – Composite: UP 0.6 percent at 3,925.12Dollar/yen: DOWN at 154.96 yen from 155.32 yen on FridayEuro/dollar: UP at $1.1653 from $1.1642Pound/dollar: UP at $1.3333 from $1.3329Euro/pound: UP at 87.38 pence from 87.35 penceWest Texas Intermediate: FLAT at $60.07 per barrelBrent North Sea Crude: FLAT at $63.74 per barrelNew York – Dow: UP 0.2 percent at 47,954.99 (close)London – FTSE 100: DOWN 0.5 percent at 9,667.01 (close)