How cars, batteries and low-cost goods shaped China's $1tn trade surplus

China's global goods surplus has surged past $1 trillion, driven by booming auto and battery exports, and a competitive edge from weak domestic demand and currency dynamics

China has posted a historic global goods trade surplus of $1.08 trillion in the first 11 months of the year 2025, highlighting the country’s export dominance even as its domestic economy struggles with weak consumer confidence and deflation. The surplus, powered by $3.41 trillion of exports, has reportedly already surpassed every previous full-year total.

 

The data highlights a widening gap between China’s global export strength and a softer picture at home, where imports have slipped, and policymakers are contending with declining prices and muted spending. The disparities have drawn heightened scrutiny from global leaders. In Beijing this week, International Monetary Fund (IMF) Managing Director Kristalina Georgieva cautioned that China’s trade relations are marked by “imbalances”, days after French President Emmanuel Macron described them as “unbearable”.

Trump tariffs reshape trade Chinese export routes in Southeast Asia 

One of the sharpest shifts this year has been China’s surge in exports to Southeast Asia, a trend which has been closely watched for its links to Donald Trump’s tariff actions earlier this year. China’s surplus with the region reached $245 billion in the first 11 months, compared with $191 billion for all of 2024. Growth came mainly from Vietnam, Thailand and Malaysia, reversing last year’s deficit with the latter, according to an analysis by The New York Times (NYT).

 

Economists cited by the report said that the rise reflects the transshipment of Chinese goods through Southeast Asia, whose own exports to the United States (US) have jumped. Chinese firms have also shifted final assembly to Southeast Asia, Mexico and parts of Africa to partly bypass US tariffs. China’s 11-month surpluses rose sharply elsewhere too, up $27 billion in Africa, nearly $20 billion in the European Union (EU) and $9 billion in Latin America.

Autos and EV batteries deliver the biggest boost 

Autos have provided the single largest increase to China’s surplus this year, the Financial Times (FT) noted. The surplus for the sector rose $22 billion in the first 10 months to reach $66 billion, a dramatic reversal from three years ago when China ran a global deficit. China overtook Japan as the world’s biggest auto exporter in 2023, and this year its car trade with the EU flipped from deficit to surplus. Exports also strengthened its surplus with Africa.

 

Electric vehicle battery exports added further momentum. China recorded a $64 billion trade surplus in batteries in the first 10 months, reflecting the country’s industrial pivot toward EVs and the growing global presence of companies such as BYD, the report further said.  ALSO READ | Mexico to impose tariff hike of up to 50% on India, Asian nations from 2026

Electronics and low-value packages remain major drivers 

Foreign-invested firms continue to play a central role in China’s export engine. They contributed $837 billion of exports in the first 10 months, more than a quarter of the total. Phones and telecom products together delivered a $151 billion surplus, while computers added $70 billion, though both categories saw year-on-year declines, FT noted.

 

Another fast-growing contributor is a surge in low-value parcels, the model used by online retailers like Shein and Temu. These packages added $22 billion to the surplus over the first 10 months, driven largely by shipments to Europe.

Weak yuan and deflation give Chinese exporters an edge 

Despite appreciating against the dollar this year, the yuan remains weak compared with the past decade. Combined with deflationary pressure in China, the currency dynamic has strengthened pricing competitiveness for Beijing. Economists cited by FT noted that falling consumer and producer prices, alongside inflation in Europe and the US, give Chinese exporters an advantage.

 

The IMF is also conducting its annual review of China’s currency and financial policies. Some economists and business leaders, including former Chinese central bank officials cited by the newspaper, argued that Beijing should allow the renminbi to rise to support households by making imports cheaper. But a stronger currency could pressure exporters and affect factory employment.

Imports soften as domestic demand remains sluggish 

China’s imports edged down to $2.3 trillion in the first 11 months of this calendar year, weighed by slow demand and a prolonged downturn in the property sector. The majority of the Chinese import basket consisted of commodities such as iron ore, copper and soybeans, alongside semiconductors, which continue to face US trade restrictions.

 

But economists have pointed to signs of import substitution in machinery and industrial robots, suggesting rising domestic production. However, with investment falling and construction still weak, exports are playing an outsized role in propping up growth. Some analysts have forecast that the Chinese trade surplus could rise toward $1.5 trillion if fixed-asset investments, which depend on commodity imports, fail to recover.