Notes

The price of China’s trade success. In 2024, China posted a trade surplus of almost US$1 trillion, according to data published by Beijing this week. It’s the biggest annual surplus any country has ever recorded, even adjusting for inflation.

This dominance is largely from manufactured goods: China is the largest exporter of cars globally, for example, and makes almost all the world’s solar panels. The country now produces about a third of the total of all manufactured goods—more than the U.S., Japan, Germany, South Korea, and the U.K. combined. How is Beijing doing it?

The governments of countries around the world share an answer they don’t like: They accuse China of intentionally producing vastly more than its own economy can buy and then selling the excess at cut-rate prices abroad, pushing local manufacturers out of their markets. Hence a rise in anger with Beijing in these countries—and the accompanying rise in tariffs on Chinese imports. Brazil, India, Indonesia, and Turkey have all imposed them, in an attempt to protect domestic manufacturers. The EU and U.S. meanwhile raised tariffs last year on Chinese car imports—and incoming U.S. President Donald Trump has long said he plans to raise tariffs on Chinese goods drastically.

In May, Alice Han looked at the causes and consequences of China’s export surge. What might appear as an unprecedented success, Han says, is also a sign of fundamental weakness. Despite decades of attempted incentives from the central government, household consumption in China remains relatively low. And with other problems in the economy, the Chinese Communist Party has only one way to generate economic growth—and jobs—that citizens have come to expect: exports. That’s why Beijing has been making its massive investments in manufacturing—and why massive trade surpluses, increasing tensions, and tariffs have come with them.

—Michael Bluhm