The Chinese Administration of Customs released data indicating that China’s trade surplus reached $1.19 trillion. This is an increase of 20% from the previous year of 2024. The figure had already been exceeded in November 2024 by surpassing the $1 trillion mark. This is due to the fact that Chinese exports have flooded global markets. Even after adjusting for inflation, this export figure remains massive.

Interestingly, this surplus has emerged despite the fact that Trump used tariffs to contain China’s factories. Although these tariffs reduced China’s trade surplus with the United States, Chinese sales subsequently increased in other regions of the world. Chinese exports are also becoming more attractive due to inflation in Western markets.

These alternatives in global markets, in many cases, have bypassed U.S. tariffs by shipping goods to the United States through Southeast Asia and elsewhere. The number of subsidiaries of Chinese businesses in Africa and Southeast Asia assembling components from China and then shipping them to the United States to bypass U.S. tariffs has increased.

Internally, the Chinese leadership has pursued an ambitious industrial policy to replace imports with domestic production, with the objective of building national self-reliance in many industrial sectors.

In addition, China’s trade surplus is also the result of a weak currency, which makes the country’s goods less expensive in foreign markets and imports more expensive. The Chinese government pursued a strategy of weakening the renminbi during the COVID-19 period and has taken few steps to restore its value.