In its push for manufacturing and technological dominance, China continues to clear one milestone after another. In the early 2020s, it overtook Germany and Japan to become the world’s largest auto exporter. In January, the Hangzhou-based artificial intelligence start-up DeepSeek stunned US Big Tech companies with its own low-cost large language model. Another marker came this week, when official customs data revealed that China’s trade surplus in goods topped a record $1tn in just the first 11 months of this year.
What does this latest landmark signify? At first glance, it underlines the scale and effectiveness of Beijing’s industrial strategy. The country has consistently generated mammoth supplies of in-demand goods ranging from rare earth elements to now increasingly high-tech products such as electric vehicles and green technologies. This means that even as the US has raised trade barriers in recent years, Chinese producers have been able to break into other markets across Europe and the developing world.
Yet the sheer size of the surplus also highlights deepening strains in China’s economic model. Domestic demand remains weak. Households are still grappling with the fallout from the property sector downturn, and government stimulus has so far failed to generate a sustained rebound in consumer spending. As a result, Chinese industry has become increasingly reliant on external demand to absorb its enormous output of low-priced goods.