Record Surplus

China’s Surplus Smashes All Records in 2025

China’s annual trade surplus has set a new world record at a whopping $1.2 trillion in 2025. This means China sells far more goods to the rest of the world than it buys, leaving it with extra money (a surplus) from global trade.

Already last month, China became the first country to report a surplus of over a trillion dollars. Then December added $114 billion to the year's final tally, thanks to booming sales to Europe, Africa, Latin America, and Southeast Asia. This was the third-highest monthly surplus on record.

US Tariffs Bite, But China Reroutes

The US–China trade dispute is reshaping the global economy, even though the rhetoric between the countries has recently softened and the trade barriers have been lowered from last Spring when tariffs on both sides briefly spiked above 100%. 

The White House tariffs on Chinese goods still average 47.5%, forcing many Chinese businesses to look for market opportunities elsewhere.

The US share of Chinese exports is shrinking rapidly, down to 11.1% last year compared to 14.7% in 2024.

Meanwhile, China's exports to the EU, Southeast Asia, and Australia are booming. Chinese firms have also shifted assembly to hubs in Mexico and Africa, allowing some goods to reach the US with lower duties. Tariffs didn’t stop Chinese exports — they simply rerouted them.

Why Keep Score of Trade Balance?

The trade balance is the scoreboard of exports minus imports. A surplus means selling more than you buy, like China today. A deficit means buying more than you sell, like the US on most years.

China’s surplus is about 6% of China’s $19.5 trillion economy, rivaling America’s dominance after WWII, when other exporters were in ruins.

Surpluses can fuel jobs and innovation, and can be used for geopolitical clout. But they can also reveal weak domestic demand.

Weak Yuan, Strong Exports

China’s trade boom has been turbocharged by a soft currency. China’s currency renminbi (or yuan) has weakened against the euro and the dollar in recent years, making Chinese goods cheaper abroad while imports into China remain costly.

That tilt helps Chinese exporters win market share in Europe and Asia, but it leaves domestic households paying more for foreign products like wine, cosmetics, or gasoline.

The yuan is valued under a managed float, with the PBOC (the Chinese central bank) setting a daily midpoint and stepping in to curb big moves.

Surplus Isn't All Good News

China’s surplus is drawing scrutiny at home and abroad. Chinese officials have accused the US of distorting its trade balance by restricting imports of high-end chips and some other key components. Beijing argues that without restrictions, it would buy more foreign products.

Kristalina Georgieva, the head of the International Monetary Fund, warned China last month that the economy is too big to continue generating growth largely from exports and encouraged the country to lean more on domestic consumer demand by allowing its currency to strengthen. A stronger yuan would make imports cheaper, but risk slowing factory growth and job creation.