In August 2025, China’s exports increased by 4.8% year-on-year in yuan terms, down from 8% the previous year. In US dollar terms, exports grew by 4.4%, which was below expectations of 5%.
China’s trade balance in US dollar terms for August reached $102.33 billion, exceeding the forecast of $99.2 billion. However, imports rose only 1.3% year-on-year in US dollar terms, missing the predicted 3% growth, despite a record import of 12.3 million metric tons of soybeans.
Yuan Terms and Year-to-Date Figures
In yuan terms, August exports increased by 4.8%, with imports up by 1.7% year-on-year. The year-to-date figures show total goods imports and exports rising to 29.57 trillion yuan, a 3.5% increase compared to the previous year.
The trade surplus with the US for the year-to-date stands at $185.8 billion, with exports to the US dropping by 33% in August. Additionally, data from Citi indicates a continued decline in China’s container ship departures to the US, with a 24.9% year-on-year fall in the 15 days ending 3 September, following a 12.4% decrease the previous week.
The August trade data shows a larger-than-expected surplus, but the underlying numbers point to concerning weakness for the global economy. Both export and import growth missed expectations and slowed down significantly from the month prior. This suggests we should consider protective put options on major equity indices that are sensitive to global growth.
The sharp slowdown in import growth to just 1.3% flags weakening domestic demand inside China. This aligns with recent global manufacturing PMI data, which showed a contraction for the twelfth consecutive month in August 2025, falling to a reading of 48.7. We see this as a clear signal to build bearish positions on industrial commodities, especially copper futures, which have already fallen 8% since their highs earlier this year.
US Exports and Container Ship Departures
A 33% year-on-year collapse in exports to the U.S. is the most significant warning sign, and it’s confirmed by a 24.9% drop in container ship departures. This points to a severe downturn in American consumer demand, suggesting put options on U.S. retail and tech stocks with heavy Chinese supply chain exposure could perform well. We saw a similar dynamic during the 2018-2019 trade disputes, which led to significant underperformance in those specific sectors.
The data reinforces a bearish view on the Australian dollar, which is often traded as a liquid proxy for Chinese economic health. With the U.S. Federal Reserve signaling it will maintain high interest rates, shorting the AUD/USD currency pair presents a clear opportunity. The last time Chinese import data disappointed this severely was in late 2024, preceding a multi-week decline in the Aussie dollar.
This broad-based slowdown increases the probability of negative economic surprises over the next few weeks. We believe this environment warrants positioning for higher market volatility. Traders should consider buying VIX futures or out-of-the-money call options on volatility indices to hedge portfolios against a potential spike in uncertainty.
