China's $1 trillion trade surplus: Not all good news
In November, China surpassed the $1 trillion-mark in trade surplus.
But behind the big number, factories have been stuck in deflation for over three years straight, with producer prices dropping again last month.
Even though exports are up—thanks to companies shifting production to places like Southeast Asia and Mexico to dodge US tariffs—the country's industrial sector is still struggling at home.
Why does this matter?
China's export game is changing fast, with more goods heading to Southeast Asia, Africa, and Latin America as exports to the US slump by nearly a third.
But despite all that global hustle, weak demand and falling profits at home are dragging things down.
The share of exports in China's economy has dropped from 35% in 2006 to about 20% now, and ongoing deflation could mean fewer jobs and less investment ahead.
For anyone watching how the world economy shifts—or thinking about where future opportunities might be—this is a story worth knowing.