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China reports historic trade surplus in 2025
China announced a record annual trade surplus of $1.19 trillion on Wednesday, surpassing the previous year's milestone of $993 billion despite ongoing trade tensions with the United States.
Surplus driven by global demand, weak domestic economy
Beijing's customs agency attributed the unprecedented figure to robust overseas demand for Chinese goods, particularly in Southeast Asia, Africa, and Latin America. Exports of green technology, AI-related products, and robotics saw notable growth, according to Wang Jun, deputy director of China's customs administration.
Meanwhile, a sluggish domestic economy-strained by a property crisis and rising debt-reduced demand for imports, which rose by just 0.5% in 2025. A weaker yuan and persistent inflation in Western markets further boosted the competitiveness of Chinese exports.
US tariffs fail to curb China's trade dominance
Despite sweeping tariffs imposed by the Trump administration in 2025, China's monthly trade surpluses exceeded $100 billion seven times last year. While exports to the US declined, Beijing offset the loss by expanding trade with other regions.
"These figures are extraordinary and hard-won given the profound challenges in global trade," Wang said during a press briefing, acknowledging the "uncertain external environment" ahead.
Mixed reactions from analysts and trading partners
Trade policy analyst Deborah Elms of the Hinrich Foundation described the surplus as a "mixed blessing" for China. While it has spurred job creation and economic growth, foreign markets are increasingly scrutinizing Chinese goods amid fears of market flooding.
"China's success will likely continue in 2026 as its products become more embedded in global supply chains," Elms said. "But this could also trigger protectionist backlash from struggling industries abroad."
Trade tensions persist despite temporary truce
Tensions between Washington and Beijing escalated in April 2025 when the Trump administration imposed tariffs on goods from over 90 countries, with the harshest measures targeting China. The move sparked threats of retaliatory triple-digit tariffs before a temporary détente was reached during a Trump-Xi meeting in South Korea in October.
While the truce averted a full-blown trade war, existing tariffs continue to dampen Chinese exports to the US. Analysts warn that 2026 could bring renewed turbulence as businesses brace for further policy shifts.
Outlook for 2026
China's trade dominance appears set to endure, with its products increasingly integrated into global markets. However, Wang cautioned that external risks-including protectionist policies and economic instability-could pose challenges in the coming year.
