Exports to Asia and Europe remain high, while growing trade barriers are making the environment more difficult
China's economy is caught between two forces. On the one hand, the ongoing real estate crisis continues to weigh on private consumption and large parts of the domestic economy, while on the other hand, foreign trade remains a key anchor of stability. As our chart of the month clearly shows, global demand for Chinese products remains robust despite geopolitical tensions and weaker US demand. The markets in Asia and Europe in particular contributed significantly to China achieving a record trade surplus of US$1.2 trillion in 2025.
At the same time, it is clear that China's model is heavily dependent on foreign countries. Without strong domestic consumption, which is recovering only slowly due to high household debt and the uncertain financial situation of many citizens, the country is dependent on exporting its production surpluses to the global market. The focus on exports is therefore not only a conscious strategic decision, but also a necessary economic support. Most recently, net exports contributed 20% to China's total economic output.
However, these high export surpluses are increasingly coming under international pressure. Across regions, there is growing concern about market distortions caused by low-priced Chinese goods, overcapacity in key industries, and dependencies in sensitive supply chains. Political countermeasures such as tariffs, industry support programs, or “de-risking” strategies could complicate the previously stable export flows in the future.
Nevertheless, our chart shows that global trade with China continues to flourish and is more important than ever for China. As long as domestic demand remains sluggish, the global market is indispensable for the country's economic stability.
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