KYOTO ¨C China¡¯s export engine remains remarkably powerful. The country ended 2025 with the world¡¯s largest-ever merchandise-trade surplus ¡ª $1.2 trillion ¡ª underscoring its enduring industrial competitiveness. But that money is not going where it used to go.
To be sure, that $1.2 trillion figure, which comes from customs data, is somewhat misleading. The balance of payments (BoP) ¡ª which records transactions between residents and nonresidents of a country ¡ª shows a slightly smaller surplus of around $1.1 trillion.
The money available for recycling is smaller still. While China boasts a huge surplus in trade in goods, it runs a significant services deficit ¡ª $238 billion in 2025, including nearly $199 billion in outbound tourism spending. China also runs a primary income deficit of $110 billion, reflecting profits and dividends paid to foreign investors in China. The country¡¯s current-account surplus for 2025 thus amounted to $735 billion ¡ª a record-breaking figure, to be sure, but much smaller than the headline-grabbing goods surplus.
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