China's export and import growth rate in Dec. 2025 far exceeded market expectations. In a yearlong tariff war with the United States, efforts to reduce reliance on exports to the U.S. and increase shipments to Africa and Southeast Asia proved effective. Thanks to solid exports, the trade surplus hit an all-time high. Still, some noted that "it is harmful to the global economy for the world's second-largest economy to sustain growth through exports alone."
On the 14th, according to China's General Administration of Customs, exports in Dec. rose 6.6% from a year earlier, beating the market forecast (3.1%) and the previous month's growth rate (5.9%). During the same period, imports increased 5.7%, also far exceeding the market forecast (0.9%) and the previous month's growth rate (1.9%). It was the biggest increase since September last year (up 7.4%).
As a result, China's annual trade surplus in 2025 is expected to reach $1.19 trillion, up 20% from the previous year. Despite the tariff war with the United States, export diversification is cited as the reason for the record trade surplus. Looking at China's annual 2025 exports by country and region, shipments to Africa jumped 26% from a year earlier, the biggest increase, while exports to Southeast Asia rose 13%, and exports to the European Union (EU) and South America increased 8% and 7%, respectively. In contrast, exports to the United States plunged 20%.
Backed by global demand and price competitiveness, China's exports are expected to remain solid this year as well. However, the United States' notice of imposing a tariff on countries with a transaction with Iran is a risk factor. Also, since exports outperformed expectations for all of 2025, there is a possibility that the export growth rate will slow for a while this year due to the base effect.
Foreign media said China should move away from export dependence and focus on reviving domestic consumption. According to the New York Times (NYT), Kristalina Georgieva, managing director of the International Monetary Fund (IMF), said at a news conference last month that "China, the world's second-largest economy, is too large to achieve robust growth through exports alone, and continued reliance on export-led growth risks exacerbating global trade tensions." She then urged China to move away from relying on exports while maintaining a strong yuan and to work to stimulate domestic consumption.
The NYT noted that "trade imbalances caused by China's large trade surplus have created millions of jobs in China but led to factory closures and mass layoffs in trading partners." The Financial Times (FT) also cited Cornell University professor Eswar Prasad as saying, "China's enormous trade surplus both showcases its export prowess and symbolizes the weaknesses of China's growth model," adding, "Relying on exports rather than domestic demand for economic growth is a bad sign for both China and the global economy."
Meanwhile, the market is focusing on the 4th-quarter and annual gross domestic product (GDP) growth rate for 2025, scheduled to be released next week. According to Reuters, experts projected China's 4th-quarter growth rate at 4.5%. The Chinese government is targeting "5% annual growth."