While China’s trade surplus is often attributed to its industrial policies and trade barriers, this explanation is misleading. Industrial policies do matter at the sector level, with government subsidies boosting exports in industries such as shipbuilding, solar panels and electric vehicles (EVs), but these gains do not necessarily translate into improvements in the trade balance.
China’s massive trade surplus, which reached a record of US$1.2 trillion ($1.56 trillion) in 2025, has become a central fault line in its economic relations with other countries. As competition from Chinese imports increasingly weighs on domestic industries, French President Emmanuel Macron has warned that Europe faces a “Chinese tsunami” and called for a “rebalancing”. Policymakers across the continent have voiced similar concerns.
This pressure is unlikely to ease anytime soon. The Chinese economy is growing faster than that of its trading partners, so even if its current-account surplus remains stable as a share of China’s own GDP, its bilateral trade surpluses could continue to grow.
