Opinion China’s exports hold up but there are pain points

In 2025, US President Donald Trump upended the global trading system. In April, he unveiled his policy of reciprocal tariffs, targeting nations across the world. Trump’s ire was particularly directed at Beijing, accusing it of unfair trade practices, and a pattern of “record setting tariffs, non-monetary tariffs, illegal subsidisation of companies, and massive long-term currency manipulation”. At one point, Trump raised the tariffs imposed on China to a peak of 145 per cent. The tariffs were, in part, meant to address the growing US trade deficit. Several months later, the effects of the tariffs are now visible in the Chinese trade numbers. But the picture that emerges is not straightforward.

As per the latest data, China’s exports to the US have indeed fallen by around 20 per cent in 2025. But its overall trade surplus has risen to a staggering $1.19 trillion in 2025, up 20 per cent from $993 billion in 2024. This resilience underlines its dominance in global manufacturing and trade and its ability to withstand shocks. It also implies that the fall in the surplus with the US has been offset by gains in other markets, as Chinese goods have flooded other regions such as Southeast Asia. As per ING, a global financial firm, strong export growth was observed to ASEAN, India, the EU and Africa, with products like semiconductors, ships and autos growing at a robust pace. This surge in Chinese exports will only intensify competitive pressures for other countries in their domestic and foreign markets. But healthy exports have also meant that China’s growth has held up better than expected, by offsetting domestic weakness. In its Global Economic Prospects, the World Bank noted that “activity in China proved more robust than anticipated, mostly on account of fiscal stimulus and increased shipments to non-US markets”.

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The latest data will raise the pressure on China to allow its currency to strengthen and boost domestic consumption. Last year, the IMF had linked China’s export performance to “a significant real exchange rate depreciation”, and recommended greater exchange rate flexibility and a pivot towards consumption-led growth. Beijing will have to carefully navigate its 15th Five Year Plan period, 2026 to 2030, as it seeks to address the pain points in the economy while trying to achieve its stated priorities and maintain the growth momentum.