China’s Lauded Trade Dominance Not Positive as It Seems

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China is breaking export and trade records. For the first 11 months of 2025, sales of its products overseas topped a $3.4 trillion equivalent. The country’s cumulative surplus of exports over imports equaled $1.08 trillion.

Noting these record amounts, media outlets gushed. The Wall Street Journal, typically a sober voice amid media noise, said of the figures that they underscored China’s “dominance.” Behind the glowing aggregates, however, lie signs of trouble for China’s economy, and in the not-too-distant future.

Noteworthy was how China achieved these records despite American resistance to Chinese exports. For years, even when Donald Trump was out of office, the United States has imposed tariffs on Chinese goods entering the country and taken other steps to discourage trade with China. In the months since Trump took office last January, his administration has added to these trade impediments, raising tariffs dramatically, placing special port fees on Chinese shipping, and otherwise limiting China’s access to American products and markets.

The European Union, much less strident and vocal than Trump, has nonetheless taken similar steps, placing steep tariffs on Chinese-made electric vehicles and otherwise seeking ways to protect what French President Emmanuel Macron recently described as the continent’s “industrial and innovative model.” He went so far as to threaten China with higher tariffs if bilateral trade between the two economies did not move toward balance.

However impressive China’s record on trade looks, there can be little doubt that American and European hostility has upset China’s export machine. November figures show Chinese exports to the United States down by almost 30 percent from year-ago levels.

Chinese exports to Europe had surged earlier this year, largely because China had shifted its focus away from an increasingly difficult situation with the United States. But by midyear, European resistance to these product flows began to bite so that Chinese export levels to the region by October, the most recent period for which complete data are available, were 11.3 percent lower than in May and about even with levels in October 2024.

The records that have elicited so much media enthusiasm resulted entirely from a dramatic Chinese pivot to what is commonly referred to as the “Global South”—the markets of ASEAN (the Association of Southeast Asian Nations), markets elsewhere in Asia, in India, the Middle East, Africa, and Latin America.

Chinese exports showed marked increases in all these regions. Exports to the ASEAN nations have risen by 11 percent from year-ago levels to a total of over $53 billion, half again more than Chinese exports to the United States and one-fifth again higher than Chinese sales in Europe. Exports to ASEAN and these other regions more than compensated for what was lost in the United States and Europe.

Ultimately, however, China’s 2025 answer will prove to be unsustainable. The initial sales surge from China’s pivot cannot be repeated year after year. Even if the Global South manages optimistic growth targets, these economies will remain too small to substitute for U.S. and European markets combined.

What is more, these Global South nations will, in time, likely resist the dominance of Chinese products, as have both the United States and Europe. These developing nations want domestic production capacities that an ongoing flood of Chinese products can smother.

On a still more fundamental level, this year’s trade success also calls attention to China’s failure to develop domestic engines of growth. The relative loss of Western markets should have reinforced Beijing’s stated efforts to find an economic impetus in the Chinese consumer and in investment by private China-based companies. But despite Beijing’s lip service to such goals, the economy has failed utterly to make such a shift.

To be sure, China’s property crisis and other domestic economic troubles have made the transition to a domestic growth engine difficult, but by Beijing’s own admission, it is essential. The failure has left China as export-dependent as ever and hence prey to what happens abroad, a fact that will matter a great deal when, as is likely, the Global South, like Europe and America, tires of the harm done to their economies by the flood of Chinese exports.