Published on: 2026-08-21
Source: People’s Republic of China — Translation
An important disclaimer is at the bottom of this article.
In recent years, the international competitiveness of Chinese industry has been rapidly growing, and the trade surplus is increasing. Some countries use this as a reason to put forward the thesis that “Chinese overproduction is displacing the industries of other countries.” However, this point of view is completely unfounded.
Firstly, trade surplus and overproduction are concepts of different levels.
Surplus is a macroeconomic concept. Overproduction is an industrial economic concept that reflects a situation where production volume in a certain industry exceeds demand over a certain period.
History shows that industrially developed countries such as the United Kingdom, the United States, Japan, and Germany have maintained a trade surplus for a long time. If a surplus directly indicated overproduction, then “excessive” industries could be found in any country, since every country has a surplus in certain sectors.
The assessment of excess production capacity depends on indicators such as the capacity utilization rate, inventories, prices, and profits. A trade surplus by itself is not evidence of overproduction.
Secondly, China’s achievement of a trade surplus demonstrates that China’s industrial system is holistic and efficient. It is an objective result of changes in the global system of division of labor and trade structure.
China’s export growth is driven not only by economies of scale and increased innovation capacity but also by demand from other countries for a “green transition” and industrialization. From the perspective of the distribution of trade benefits, it can be said that “the surplus is in China, while the interests belong to all parties:”
In 2025, enterprises with foreign capital accounted for 27% of China’s exports and 16% of its surplus. Consumer goods supplied by China reduce consumer expenses in other countries and mitigate inflationary risks for them. The export of production equipment and intermediate products from China also provides significant support for the industrialization of trading partners. For example, the growth of exports to Europe is mainly concentrated in areas such as photovoltaics, electric vehicles, and lithium batteries.
Moreover, from the perspective of the balance of payments, China has a surplus in goods trade but a deficit in trade in services as well as in capital and financial accounts. Overall, China’s current account surplus is about 3.7% of the country’s GDP, which is within reasonable limits recognized by the international community.
Thirdly, China has never deliberately aimed for a surplus, as it is simultaneously both the “world’s factory” and the “world’s market.”
During the 14th Five-Year Plan period (2021–2025), China’s total import volume exceeded 90 trillion yuan. In terms of import volume, it has ranked second in the world for 17 consecutive years and is the main export destination for nearly 80 countries. China has implemented zero import tariffs for 63 countries. It is the only country in the world that holds the International Import EXPO. To date, all 8 exhibitions held have been successful, with the total volume of deals signed exceeding 580 billion US dollars. All of this demonstrates that China consistently promotes a balance between exports and imports and steadily expands the openness of its market.
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