The Tamesis
China reported a record trade surplus of nearly $1.2 trillion by 2025 after the Trump administration imposed tariffs that forced it to diversify into markets in other parts of the world.
Shifting focus to Southeast Asia, Africa and Latin America could help buffer China’s economy from U.S. tariffs, trade and geopolitical fallout Tensions rise since Trump’s return Enter the White House in early 2025.
This news helps make up for the country’s losses A severe slowdown in the domestic economyBut it has also rattled local manufacturers and stoked trade tensions with officials in Europe and elsewhere.
See also: Coal power use falls in China and India for first time in half a century
“The Chinese economy remains extremely competitive,” said Fred Neumann, chief Asia economist at HSBC. “While this reflects rising productivity and technological sophistication among Chinese manufacturers, it is also due to weak domestic demand and consequent overcapacity.”
Entering 2026, Beijing still faces many challenges, including deflecting increasing global capital concerns about China’s trade practices and excess capacityand their over-reliance on key Chinese products.
One of the key questions facing policymakers is: How long can China’s $19 trillion economy continue to offset the effects of a housing downturn and weak domestic demand by shipping cheaper goods to other markets?
Tensions with trading partners
“China’s growing trade surplus is likely to exacerbate tensions with its trading partners, especially those that rely on manufacturing exports,” Neumann said.
Customs data showed on Wednesday that the manufacturing giant’s full-year trade surplus was $1.19 trillion, a figure comparable to the GDP of the world’s top 20 economies such as Saudi Arabia. Breaking through the trillion dollar limit First time in November.
“As trading partners become more diversified, (China’s) ability to withstand risks has increased significantly,” Wang Jun, deputy director of China’s General Administration of Customs, said at a press conference after the data was released.
Outbound freight volumes from the world’s second-largest economy rose 6.6% year-on-year in December, compared with 5.9% growth in November. Economists polled by Reuters had expected growth of 3.0%.
Imports rose 5.7% after rising 1.9% the previous month, also exceeding expectations for a 0.9% increase.
“Strong export growth will help ease weak domestic demand,” said Zhang Zhiwei, chief economist at Pindian Asset Management.
“Combined with the boom in the stock market and the stability of Sino-US relations, the government is likely to keep its macro policy stance unchanged at least in the first quarter.”
Exports to Africa, ASEAN and EU
The yuan held steady after the upbeat data, although stock investors welcomed the data that beat expectations. In early trading, the Shanghai Composite Index and the blue-chip CSI 300 Index both rose by more than 1%.
The Asian powerhouse’s monthly trade surplus exceeded $100 billion seven times last year, in part due to a weaker yuan, and only once in 2024, underscoring how Trump’s actions have done little to undermine China’s trade with the wider world, even as he restricted exports to the United States.
Exports to the United States will fall by 20% in dollar terms in 2025, while imports from the world’s top economy will fall by 14.6%. Chinese factories have successfully expanded into other markets, with exports to Africa increasing by 25.8% and exports to the ASEAN group of Southeast Asian countries increasing by 13.4%. EU exports increased by 8.4%.
Chinese Rare earth exports Production in 2025 soared to the highest level since at least 2014, even as Beijing began restricting shipments of several medium and heavy elements in April, a move analysts viewed as an effort to demonstrate its leverage over Washington while negotiators negotiated soybean purchases, a potential Boeing aircraft deal and TikTok’s U.S. business.
The world’s largest agricultural importer bought record amounts of soybeans in 2025, driven by a sharp increase in shipments from South America, while Chinese buyers held off on buying the U.S. crop for much of the year as trade tensions persisted.
The upheaval brought about by Trump’s actions will continue
Economists expect China to continue to gain global market share this year, helped by Chinese companies set up overseas production centers Offering lower tariffs into the U.S. and EU, and strong demand for low-end chips and other electronics.
But there are already signs in Beijing Recognizes the need to temper its industrial largesse if it is to maintain its success and address the image problem caused by excessive exports.
last week it Eliminate export tax rebates for similar subsidies in the solar industryIt is a long-standing point of friction with EU countries.
Analysts pointed out that Trump’s challenge to China will not disappear anytime soon, although U.S. Supreme Court May Block President’s Tariff Increase late Wednesday.
On Tuesday, Trump said he believed China could open its markets to U.S. goods, a day after he threatened to impose 25% tariffs on countries that trade with Iran, risking reopening old wounds with Beijing, Tehran’s largest trading partner.
“Trump threatens to impose Impose 25% tariff on countries doing business with Iran Huang Zichun, China economist at Capital Economics, said this highlighted the possibility of renewed trade tensions between China and the United States.
- Reuters Additional editing by Jim Pollard
See also:
Trump’s ‘tariffs on countries trading with Iran’ could kill China truce
EU wants commitment to lowest prices if Chinese EVs avoid tariffs
Mertz says EU-India free trade deal could be signed this month
China cancels battery export tax rebate: lithium prices soar
India’s exports to US surge 22%, easing pressure to reach tariff deal
China issues first batch of simple rare earth export licenses
As exports boom and priorities shift, China’s EV subsidy era may be over
China supplies the world with far more gasoline cars than electric cars
