China's export sector finished last year with a powerful surge. This remarkable performance pushed the country's trade surplus to a staggering $1.2 trillion record in 2025. The boom continues as Chinese factories skillfully navigate around tariffs imposed by former US President Donald Trump. They are achieving this by making significant advances into markets beyond the United States.
Defying Expectations with Strong Growth
This resilience presents the biggest surprise for China's otherwise struggling economy. It could provide crucial support in the coming months. Contrary to predictions of a slowdown, exports actually accelerated last December. This achievement is particularly impressive given the high comparison base from a year earlier. At that time, Trump's re-election victory triggered a panicked rush of front-loaded orders.
Official data released on Wednesday revealed a 6.6% gain in December. This marks the fastest growth rate in three months. The figure also exceeded every forecast in a Bloomberg survey of economists.
Export Resilience as a Key Growth Driver
Barclays economists highlighted this trend in a recent report. They wrote, "We expect export resilience to extend into this year, with exports remaining an important growth driver and partially offsetting weaker domestic demand."
The combined increase in shipments to Southeast Asia and Europe proved decisive. It more than compensated for a deepening contraction in sales to the United States throughout last year.
Moving Up the Value Chain
A sharp rise in exports of high-end goods demonstrates China's progress. The country is successfully moving up the manufacturing value chain. This shift has also contributed to shrinking imports for products like automobiles.
Furthermore, global supply chains are relocating overseas. The construction of factories in other countries, partly driven by Chinese investment, is boosting demand. Chinese components, equipment, and machinery are seeing increased orders as a result.
Factors Behind the Sustained Boom
The drivers behind China's booming trade and large surpluses show no signs of fading soon. The International Monetary Fund projected the country's current account surplus at 3.3% of gross domestic product last year. This measure includes trade in both goods and services.
That level would be the highest since 2010. China's last great export upswing was tapering off then, following its early 2000s ascension into the World Trade Organization.
Highlighting Economic Imbalances
The swelling trade surplus underscores a critical imbalance. China's manufacturing strength contrasts sharply with stubbornly weak domestic consumption. This vulnerability will likely persist throughout this year and beyond.
While exports power the world's second-largest economy, domestic challenges restrain growth. A years-long property slump and falling investment are reducing the country's appetite for foreign goods. Imports like crude oil have declined as a result.
Currency and Global Market Dynamics
Deflation at home has led to depreciation of the yuan in inflation-adjusted terms. This makes Chinese products more appealing in international markets. However, China faces growing challenges as it navigates tariffs and rising economic protectionism worldwide.
The country's strategy of pouring exports into Africa, Latin America, and other regions is stirring anxiety abroad. Chinese authorities are taking steps to address escalating trade tensions. They have reduced export tax rebates for hundreds of products, including solar cells and batteries.
In another sign of easing frictions, the European Union is considering a minimum price system for Chinese electric vehicles. This would replace direct import tariffs.
Domestic Implications of Export Strength
The surge in exports carries far-reaching domestic implications. Strong external demand may weaken the urgency for Chinese policymakers. There could be less pressure to boost domestic consumer spending and investment initiatives.
