In-depth Analysis of China's Trade Balance in 2025: Opportunities and Challenges under Surplus

Current Status

In 2024, China's goods trade surplus reached approximately 7.6 trillion RMB (about 1.05 trillion USD), a record high. Exports of electromechanical products and new energy equipment grew strongly, while the share of traditional labor-intensive products declined. Exports to ASEAN and the Middle East increased significantly, but the widening surplus with Europe and the US has raised trade friction risks.

Driving Factors

• Industrial Upgrading: Exports of electric vehicles, lithium batteries, and photovoltaic products — the "new three items" — grew over 30%, boosting the overall surplus.
• Global Supply Chain Restructuring: Some industries have relocated to Southeast Asia, but China's intermediate goods exports have increased, creating a "re-export" effect.
• RMB Exchange Rate: A relatively weaker renminbi boosted export competitiveness but raised import costs.
• Domestic Overcapacity: Intense competition in some sectors drove firms to export at lower prices to maintain market share.

Challenges

• Trade Protectionism: US and EU have increased tariffs and anti-subsidy investigations, such as the EU's anti-subsidy duty on Chinese electric vehicles.
• External Demand Fluctuations: Global economic slowdown, weak consumption in developed countries, and diverging growth in emerging markets.
• Supply Chain Relocation: Low-end manufacturing is shifting to Vietnam and India, potentially eroding the long-term surplus base.
• Services Trade Deficit: Imports of travel and intellectual property continue to expand, partially offsetting the goods surplus.

Recommendations

• Market Diversification: Deepen engagement with Belt and Road countries, Latin America, and Africa to reduce dependence on Europe and the US.
• Brand and Technology Upgrading: Transition from OEM to ODM and OBM to increase product value added.
• Digital Empowerment: Leverage cross-border e-commerce and overseas warehouses to reduce intermediation costs and reach end consumers directly.
• Compliance Risk Management: Establish early-warning mechanisms for trade remedies and actively respond to anti-dumping and anti-subsidy cases.
• Services Trade Expansion: Promote exports of high-value-added services such as software, financial services, and cultural creativity to balance the structure.