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China’s trade surplus surged nearly 20 per cent to a record close to $1.2 trillion in 2025, as strong export growth to emerging and alternative markets more than compensated for a steep decline in shipments to the United States amid higher tariffs.

Official customs data showed exports rose 5.5 per cent year-on-year to $3.77 trillion, while imports remained virtually unchanged at $2.58 trillion. The surplus widened from about $992 billion a year earlier and crossed the $1 trillion mark for the first time in November.

Momentum remained strong toward the end of the year. In December, exports climbed 6.6 per cent from a year earlier, beating expectations and accelerating from November. Imports also rebounded, rising 5.7 per cent year-on-year.

Although exports to the US dropped sharply after President Donald Trump returned to office and intensified tariff measures, the impact was largely offset by rising shipments to other regions. For the full year, exports to the US fell 20 per cent, while sales to Africa jumped 26 per cent. Exports to Southeast Asia rose 13 per cent, the European Union 8 per cent and Latin America 7 per cent.

Economists said diversified demand helped exports remain a key growth engine despite rising trade frictions. One economist said exports are expected to remain a major driver of growth in 2026, even as geopolitical tensions persist.

Electronics and electrical equipment continued to dominate China’s export basket, posting an 8.4 per cent annual increase. Strong global demand for semiconductors, electronic devices and related materials also supported shipments.

Auto exports were another bright spot. Vehicle exports surged 21 per cent to more than 7 million units in 2025, driven mainly by electric vehicles and plug-in hybrids. Exports of grain and fertiliser also increased, while shipments of labour-intensive products such as furniture and footwear declined.

Robust exports helped keep China’s economic growth close to its official target of around 5 per cent, but they have also heightened concerns abroad over an influx of low-cost Chinese goods.

China’s customs authorities warned that the external trade environment in 2026 would remain “severe and complex,” though they said the country’s foreign trade fundamentals were still sound.

International institutions and analysts have urged Beijing to rebalance growth away from exports by boosting domestic demand. A prolonged property downturn continues to weigh on consumer confidence, while recent policy measures — including subsidies for energy-efficient appliances and vehicles — have delivered only modest results.

Domestic demand is expected to remain subdued this year, with analysts noting that fiscal support appears weaker than last year. Auto sales rose 6 per cent in 2025 but softened toward year-end as subsidies were scaled back.

Looking ahead, economists forecast export growth to slow to around 3 per cent in 2026. With imports expected to grow modestly, China’s trade surplus is still likely to remain above the $1 trillion mark.