China’s trade surplus surges to new highs on strong end to 2025

China’s December bucked expectations for a front-loading-related slowdown with both exports and imports beating forecasts for the year. The trade surplus surged to new record highs—to a level roughly equivalent to a top 20 economy's GDP in 2025.

December exports shake off frontloading base effect to rebound at year end

China’s exports grew by 6.6% year on year in December, up from 5.9% in November, beating our and market expectations for a moderation. On the year, exports rose 5.5% YoY, just a bit lower than 2024’s 5.9% growth rate.

This strong export performance came despite a clear drop-off of exports to the US, which fell -20.0% YoY for the full year. Exports to South Korea (-1.1%) and Japan (3.5%) were also relatively soft on the year.

Exports to other regions were enough to offset this drag in 2025, with the top export destinations of ASEAN (13.4%) and EU (8.4%) all well above the overall export growth. We also saw strong export growth to India (12.8%), Africa (25.8%), and Latin America (7.4%).

By product, semiconductors (26.8%), ships (26.7%), and autos (21.4%) were the top performers for the year. Exports with high exposure to the US such as toys (-12.7%), furniture (-6.1%), and footwear (-11.3%), were all major underperformers on the year. The export structure indicates that China continues to move up the value-added ladder.

Imports have lagged behind in 2025 but the December recovery is an encouraging data point

Arguably, the bigger surprise of the December report was that China’s imports grew by 5.7% YoY in December, up from 1.9% in November -- much stronger than expected. Overall, imports lagged in 2025, ending the year flat at 0.0% YoY.

By import origination, China’s imports rose the most from Indonesia (15.6%), Singapore (14.7%), India (9.7%), and the Netherlands (8.8%) in 2025. In contrast, the trade war with the US resulted in a -14.6% YoY drop in imports from the US. We also saw contractions in imports from Malaysia (-20.4%), Canada (-10.4%), and Australia (-7.5%) amid various tariff developments.

By product, China’s imports have been rather concentrated in its tech race efforts. Hi-tech imports rose by 9.3% YoY, with strong imports of automatic data processing equipment (18.2%), and semiconductors (10.1%). We saw steep drop-offs in auto imports (-39.7%) as well as crude oil (-8.8%) as domestic electric vehicles continue to dominate the market, and imports of construction-related products such as steel (-10.7%) and lumber (-13.9%) fared poorly on the year.

A sustained acceleration in imports could go a long way toward alleviating pressure on, and from, China’s key trading partners.

China's trade surplus reached a new record of USD 1.19tn in 2025

China’s 2025 trade surplus would’ve been equivalent to a top 20 global economy in 2024

In sum, China’s trade surplus ends the year at a new record high at $1.19tn, roughly equivalent to the GDP of a top 20 global economy in its own right. The 2025 trade surplus rose 19.9% YoY.

In our reports over the past year, we’ve frequently noted that external demand has been a major driver of economic growth in 2025. It is set to help China achieve its growth target of around 5% when the GDP data is published next week.

For China, the key question is how long this engine of growth can remain the primary driver.

• On one side of the debate, you have Chinese companies increasingly competitive on a global level, across all rungs of the value-added ladder. China’s economies of scale and decades of manufacturing infrastructure and expertise, on top of the recent national strategy to promote the modern industrial system, will likely keep Chinese companies highly competitive.
• On the other side of the debate, there is increasing trade protectionism globally. US tariffs on China have led to a precipitous drop in exports, but the slack has been picked up by the rest of the world. Should more economies also start ramping up tariffs on China, as Mexico has done and the EU has threatened to do, eventually, a tighter squeeze will be seen.

Cognizant of the risks and continuing to seek win-win cooperation, China has focused on promoting domestic demand as the future growth engine. With a growing middle class, the consumer potential for local and global products and services should not be underestimated. This process will take time, perhaps more time than some of China’s trade partners may like, but we believe this is set to be a key theme of the coming decade and beyond.

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