China Hits One Trillion Dollar Trade Surplus for First Time

What Happened?

This year, China’s export surplus reached the one trillion-dollar mark globally for the first time despite significant tariffs from the United States. Even though China’s exports to the United States were down twenty-nine percent for the year, overall, their exports worldwide were up six percent from a year ago. 

While China’s trade with the United States decreased in 2025, China added more trade in places like Europe, Asia, Africa, and Central America. For 2024, China had a net export surplus of approximately nine hundred ninety-two billion dollars. 

Why it Matters

The growth of China’s economy, now the second largest in the world behind only the United States, has been fueled mainly by exports. China’s factories produce far more goods than their domestic market can absorb, which is intentional because for years Beijing has sought economic growth by increasing foreign trade. Even with higher tariffs lowering trade with the United States, plenty of other countries are still eagerly accepting Chinese made products.

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Russia is a prime example. American economic sanctions have also been levied against Russia which have restricted trade with Europe and the United States, but Russian consumers have been more than happy to buy cheap Chinese imitations of leading western brands instead of the real thing, which many Russians can’t afford anyway. In that way, western economic sanctions against Russia have been a boon for China, while insulating most Russians from the effects of those sanctions.

The growth of purchases in Europe, Africa, and Central America underscores what Fareed Zakaria called ‘the Rise of the Rest,’ which was also the title of a book. According to Zakaria, America hasn’t fallen behind economically, but the rest of the world has grown substantially since the end of the Cold War, so what we’ve seen isn’t the decline of America but the rise of the rest of the world. A rise of the rest thesis would explain why places like Africa and Central America now have enough consumers to become major export destinations for Chinese goods.

While China has benefited from trade surpluses economically, Chinese leaders also want to grow domestic consumption as China’s own number of consumers with spending power continues to climb. In October, Beijing announced a five-year plan to focus on advanced manufacturing with the goal of increasing domestic Chinese consumption of those products. China now has its own growing consumer class who could benefit from such policies.

How it Affects You

The rise of China’s economy and its growing trade surplus represents more than just an economic challenge to the United States. After the Cold War, the dominant consensus held that free markets were the best and perhaps the only way to sustain economic growth. But China uses a combination of free market and government planning, and the success of that model challenges the idea that American-style capitalism is the only game in town. 

During the Cold War, the world had to choose between Soviet communism and authoritarianism or American capitalism and democracy. Today, China has offered a new alternative, one that is in between dominant Cold War ideologies, and many countries around the world are taking note. 

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