How China got world's largest trade surplus ever despite tariff wars – Firstpost

The world’s second-largest economy has once again shown its resilience to the world, as China closed 2025 with its largest-ever trade surplus, clocking nearly $1.2 trillion, as exporters successfully rerouted shipments to emerging markets to blunt the impact of renewed tariff pressure from the Trump administration.

According to Customs data, China posted a $1.189 trillion surplus, crossing the trillion-dollar mark for the first time, driven by stronger-than-expected export growth despite slowing domestic demand and a prolonged property slump.

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The same data showed that exports in December rose 6.6 per cent year-on-year, beating bazaar expectations of 3 per cent, while imports grew 5.7 per cent, also exceeding forecasts. The data triggered a rally in Chinese equities, with the Shanghai Composite and CSI300 indices both climbing more than one per cent in early trade.

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Beijing’s strategy of diversifying trade away from the United States has become central to sustaining growth. Policymakers have encouraged manufacturers to pivot towards Southeast Asia, Africa, and Latin America, where demand has surged. Exports to Africa jumped 25.8 per cent in 2025, shipments to the ASEAN bloc rose 13.4 per cent, and exports to the European Union increased 8.4 per cent.

By contrast, shipments to the United States fell 20 per cent, while Chinese imports from the U.S. dropped 14.6 per cent, reflecting the continuing impact of tariff barriers and political friction.

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“China’s economy remains extraordinarily competitive,” reported Fred Neumann, chief Asia economist at HSBC, noting that rising productivity and technological sophistication have strengthened manufacturers but also warning that weak domestic demand has fuelled excess capacity, pushing firms to sell aggressively overseas.

The expanding surplus is already triggering unease among global trade partners. Economists caution that persistently rising Chinese exports could intensify trade tensions, particularly with economies reliant on manufacturing exports themselves.
China’s customs vice minister Wang Jun declared Beijing’s diversified trading partnerships had “significantly enhanced” its ability to withstand external risks, underlining the government’s confidence in its current export-led strategy.

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However, the Trump factor continues to loom large. The former president has renewed threats of wider tariffs, including a proposed 25 per cent levy on countries trading with Iran, a move that could once again drag China into geopolitical crossfire.

Analysts say Chinese firms are increasingly setting up overseas manufacturing hubs to bypass tariff barriers in the U.S. and Europe, allowing Beijing to gain further global bazaar share in 2026.

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