SocGen Says China's Trade Surplus is a Structural Story That Is Not Fading

11:33 AM EST, 01/14/2026 (MT Newswires) -- China's goods trade surplus rose to a record US$1.2 trillion in 2025, supported by resilient exports and weak imports, said Societe Generale.

While tariffs reduced China's surplus with the United States, surpluses with ASEAN and the European Union expanded, driven by strong electronics and machinery exports to ASEAN and increased competitiveness in autos and small-parcel shipments to Europe, the bank wrote in a note.

According to SocGen, the surplus is largely structural, underpinned by three forces: strong manufacturing competitiveness supported by industrial policy and import substitution; persistently weak domestic demand following the property downturn; and rapid electrification, which is reducing energy import growth.

China continues to gain global market share across many sectors and is advancing quickly in mature semiconductors, robotics, data-center equipment and biotech.

The easing of the trade surplus hinges largely on rebalancing toward consumption, which remains challenging, stated the bank. Fiscal constraints limit expansion of the social safety net, housing still dominates household wealth despite equity-market reforms, and income distribution remains uneven.

However, there are signs of more traction, added SocGen. Policymakers face growing external pressure over trade imbalances, yet currency appreciation remains difficult in the near term, given domestic deflation and excess capacity.

Over time, however, a stronger renminbi (CNY) may better support rebalancing and internationalization objectives, it pointed out.

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