For the first time in modern history, a country's trade surplus has exceeded one trillion dollars in a year. This milestone belongs to China, whose surplus in the first 11 months of 2025 reached $1.08 trillion—a 22% increase over the previous year. This has occurred despite higher US tariffs and rising global protectionism, amounting to about 1% of global GDP.
A surplus means that the world paid China a trillion dollars more than China paid to the world. However, this is not only a sign of economic strength but also reflects structural imbalances within China. The country's economy produces about a third of global industrial goods, but domestic demand lags behind manufacturing capacity. In 2025, exports totaled around $3 trillion and imports $2.3 trillion. Export growth was strongest towards the EU, ASEAN countries, Africa, and Latin America, often through intermediaries.
Chinese industrial clusters make prices very competitive: producing an electric car in China is twice as cheap as in Europe thanks to supplier concentration, scale, and state support through subsidies and cheap loans. However, the domestic market is saturated, with persistent deflation, low inflation, and factories operating at 70–80% capacity, pushing companies to export the surplus. China is now the largest exporter of automobiles and controls the majority of global solar panel production.
The key reason behind weak consumption is the real estate crisis. Most Chinese households keep their savings in property, but falling prices and mounting debt have led to decreased spending. Consumption stands at only 38–40% of GDP, while household debt has risen to over 60% of GDP. Internal demand remains weak and overproduction is exported, creating global imbalances.
The global response has been hundreds of new trade restrictions and higher tariffs in the EU, US, and many developing countries. However, much Chinese export is rerouted through neighboring states or shifted to offshore manufacturing. The IMF and other international institutions urge Beijing to boost internal demand. China has launched new fiscal stimuli, subsidies, and government programs, but there is little public trust in the system.
For the world, China's surplus is both an opportunity and a risk. Cheap imports restrain global inflation, especially in green energy, but bring losses to foreign industries and increased dependence on Chinese supplies. The global market is responding with protectionist measures. Future developments hinge on China's reforms and the international response: whether markets remain open or become increasingly segmented and blocked.
