China Logs Record $1.19 Trillion Trade Surplus in 2025 as Exports Pivot Away From US

China booked a record trade surplus of $1.189 trillion in 2025, as exporters shifted quickly towards non-U.S. buyers and customs data showed stronger-than-expected growth in both shipments and imports during December, despite higher tariffs and renewed political pressure from President Donald Trump’s administration.

December exports rose 6.6% in dollar terms from a year earlier, while imports increased 5.7%, both beating Reuters’ forecasts and improving on November’s gains, bolstering signs that foreign demand still helped offset weak spending at home and a prolonged property downturn inside the $19 trillion economy.

China trade surplus and global export shifts

The full-year trade surplus matched the annual output of economies like Saudi Arabia, underlining how external demand stayed central for China as factories leaned on global markets to counter domestic softness and long-running stress in the real estate sector, which had weighed on consumer and business confidence.

Customs data showed the 2025 surplus broke through the trillion-dollar threshold for the first time in November, then climbed further by year-end, with Beijing’s long-standing focus on manufacturing exports helping to keep production lines busy even while authorities grappled with falling home prices and cautious household spending.

Economists said the export strength gave policymakers some breathing space but also risked creating new tensions abroad, because many partner governments had already raised concerns about Chinese industrial capacity, state support for producers and the impact of cheap goods on their own manufacturing workforces.

One key policy dilemma was how long Beijing could keep leaning on external demand, shipping lower priced goods worldwide to compensate for sluggish domestic activity, without provoking more forceful trade responses from major markets that also relied heavily on sales of manufactured products.

China trade surplus and weak domestic demand

"China's economy remains extraordinarily competitive," said Fred Neumann, chief Asia economist at HSBC. "While this reflects gains in productivity and the rising technological sophistication of Chinese manufacturers, it is also due to weak domestic demand and attendant excess capacity."

Some analysts argued that the combination of rising surpluses and low internal demand suggested spare industrial capacity remained large, creating a risk of further trade rows if Chinese firms continued to increase market share abroad while household and private sector spending stayed subdued inside China.

"Rising Chinese trade ​surpluses could raise tensions with trade partners, especially those reliant on manufacturing exports themselves," Neumann said, warning that political pushback might intensify in countries where factories faced direct competition from Chinese products across sectors such as machinery, electronics and consumer goods.

China trade surplus and diversified markets

Beijing’s strategy of pushing companies to widen their reach beyond the United States played a central role in cushioning the impact of Trump’s tariffs, as firms ramped up sales to Southeast Asia, Africa, Latin America and the European Union to maintain scale and keep utilisation rates high.

Exports to the United States dropped 20% in 2025, while imports from the U.S. fell 14.6%, but Chinese factories increased shipments elsewhere, with export values to Africa rising 25.8%, sales to the ASEAN bloc gaining 13.4%, and goods sent to the European Union growing 8.4% during the year.

"With more diversified trading partners, (China's) ability to withstand risks has been significantly enhanced," Wang Jun, a vice minister at China's customs administration, said at a press briefing, arguing that spreading exposure across more regions offered some protection from sudden policy shifts in any single major market.

The yuan held broadly steady after the trade release, while stock investors welcomed the data, with the Shanghai Composite index and the blue-chip CSI300 index both gaining more than 1% in morning trade as markets digested evidence that external demand still supported overall economic activity.

China trade surplus, rare earths and soybeans

China’s monthly trade surplus topped $100 billion in seven different months during 2025, compared with only once in 2024, helped partly by a weaker currency, which supported exporters’ price competitiveness and highlighted that Trump’s tariff measures had not substantially reduced China’s overall trade with the wider world.

Rare earth exports climbed to their highest level since at least 2014, even though Beijing introduced curbs from April on some medium to heavy elements, a step analysts viewed as a reminder of China’s leverage while negotiators discussed soybean purchases, a potential Boeing aircraft deal and the future of TikTok’s United States operations.

The country, the world’s largest agricultural buyer, also imported a record volume of soybeans in 2025, benefiting from increased shipments from South America as Chinese buyers avoided many U.S. cargoes for much of the year because of persistent trade tensions and tariff uncertainties affecting agricultural flows.

China trade surplus and policy outlook

"Strong export growth helps to mitigate the weak domestic demand," said Zhiwei Zhang, chief economist at Pinpoint Asset Management, stressing that foreign orders continued to offset sluggish consumption and investment within China’s borders during a period of property stress and cautious private sector sentiment.

"Combined with the ⁠booming stock market and stable U.S.-China relations, the government is likely to keep the macro policy stance unchanged at least in Q1." Many economists expected authorities to avoid major stimulus shifts early in 2026 while monitoring how external demand and the housing market evolved.

Forecasts suggested China would keep gaining global export share, partly through Chinese companies building factories overseas to secure lower-tariff access to the United States and European Union, and partly through steady demand for lower-end chips and other electronics, where Chinese producers held strong existing positions.

Officials had, however, started to show awareness that rising industrial exports created an image problem abroad, as critics accused Chinese firms of flooding markets, and Beijing scrapped export tax rebates for solar producers the previous week, removing a subsidy-style support that had long concerned some European governments.

China trade surplus and the Trump factor

The political environment also remained uncertain, because Trump’s renewed time in office kept pressure on bilateral ties, even as the U.S. Supreme Court prepared to consider whether some of the president’s tariff increases were lawful, a decision that could reshape the next phase of the trade dispute.

On Tuesday, Trump said China could open its markets to American products, after earlier threatening a 25% tariff on countries trading with Iran, a warning that reignited memories of earlier tariff escalations and highlighted the potential for sudden policy moves affecting several major Asian exporters.

"Trump's threat to impose a 25% tariff on countries doing business with Iran underscores the potential for ​renewed trade tensions between the U.S. and China," said Zichun Huang, China economist at Capital Economics, noting that fresh measures could hit confidence among exporters and investors on both sides.