China’s Trade Surplus Climbs to Record $1.2 Trillion as U.S. Shipments Slide

China closed the year with its largest-ever trade surplus, reaching $1.19 trillion, after a strong finish in exports and a pickup in imports, according to official customs data released Wednesday. Exports rose 6.6% year on year in December, well above market expectations, while imports increased 5.7%, their fastest pace in three months.

For the full year, exports expanded 5.5%, while imports were broadly flat, pushing the surplus up 20% from 2024. The headline strength, however, masked a deepening divergence in China’s trade relationships — most notably with the United States.

Shipments to the U.S. plunged 30% in December from a year earlier, marking the ninth consecutive monthly decline, while imports from the U.S. fell 29%. For the full year, China’s exports to the U.S. dropped 20%, and imports declined 14.6%, signaling a sharp cooling in bilateral trade amid lingering tariff tensions.

China’s customs spokesperson Lv Daliang said relations with the U.S. should be “mutually beneficial” and called for dialogue and negotiation to resolve disputes and expand cooperation. Despite a one-year trade truce agreed in October between China and United States, trade flows have yet to recover meaningfully.

As exports to the U.S. weakened, Chinese manufacturers redirected shipments to other markets. Exports to the European Union rose 12% in December, while shipments to the Association of Southeast Asian Nations increased 11%. Imports from the EU jumped 18%, though purchases from Southeast Asia declined 5%.

The swelling surplus has drawn criticism from global policymakers. International Monetary Fund Managing Director Kristalina Georgieva has urged Beijing to rely less on exports and accelerate efforts to boost domestic consumption. Economist Eswar Prasad of the Brookings Institution warned that China’s outsized surplus could prompt other countries to erect trade barriers, weighing on global growth.

Domestically, China continues to face deflationary pressure. Consumer prices were flat in 2025, undershooting the government’s target of around 2%, as a prolonged property downturn and weak labor market dampened household demand. Still, stronger exports have helped cushion the slowdown. The World Bank this week raised its 2026 growth forecast for China to 4.4%, citing expected fiscal support and resilient trade.

Looking ahead, Beijing is expected to maintain its current policy stance in the near term. Economists say robust export performance has so far offset soft domestic demand, even as China prepares to release its fourth-quarter and full-year GDP figures next week.