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China has recorded a trade surplus exceeding $1 trillion for the first time in history, official data showed this week, underscoring the country’s continued reliance on exports despite efforts to boost domestic consumption. The figure, covering the first 11 months of 2025, rose 21.7 per cent from the same period last year, driven by strong shipments to emerging markets even as exports to the United States declined sharply amid ongoing trade tensions.
Customs administration figures released indicated a surplus of $1.076 trillion, with exports growing robustly to regions such as Africa (up 27.5 per cent) and Southeast Asia (up 8.2 per cent). This diversification has helped offset a 28.6 per cent drop in shipments to the US, reflecting the impact of tariffs and geopolitical frictions.
The milestone comes as Chinese leaders concluded the annual Central Economic Work Conference, where policymakers pledged to expand domestic demand and make consumption the “main driver” of growth in 2026. A readout from the meeting emphasised “continuously expanding domestic demand,” signalling recognition of structural imbalances in an economy long criticised for over-dependence on investment and exports.
Drivers and Challenges
The surplus highlights China’s manufacturing prowess, particularly in electronics, electric vehicles and renewable energy products, sectors bolstered by government subsidies and supply chain advantages. Analysts attribute the resilience to front-loading of shipments ahead of potential further tariffs and competitive pricing amid low domestic inflation.
However, the record also exposes vulnerabilities. Household consumption remains subdued, hampered by a prolonged property downturn and precautionary saving habits. Real estate giant Vanke’s recent plea for bond repayment extensions illustrates ongoing sector strains, while youth unemployment and deflationary pressures persist.
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International observers have urged rebalancing. IMF Managing Director Kristalina Georgieva, following a recent visit, called for accelerating the shift away from exports to avoid provoking countermeasures from trading partners. The fund revised China’s 2026 growth forecast upward to 4.5 per cent, citing stimulus measures, but warned of external risks.
Global Implications
The surplus exacerbates trade imbalances, contributing to tensions with the US and EU, where officials accuse China of overcapacity in key industries. Goldman Sachs raised its 2026 growth outlook to 4.8 per cent on export strength, but cautioned that sustained surpluses could invite retaliatory actions.
Domestic policymakers face a delicate task: Stimulating consumption through tax relief and social spending while maintaining export competitiveness. The upcoming five-year plan, due in March, is expected to prioritise household income growth and expansion of the services sector.
Markets reacted cautiously, with the yuan steady and Shanghai stocks edging higher. On social media, discussions centred on the surplus as evidence of resilience, although some voiced concerns over its long-term sustainability.
As 2025 draws to a close, China’s economic model stands at a crossroads: The trillion-dollar surplus affirms global influence but reinforces the need for deeper reforms to achieve balanced, high-quality growth.
