Cover Story: Fixing China’s Trade Imbalance Needs a Home Remedy

The growing trade surplus underscores structural issues within China’s economy, which experts say can be fixed by intensified government efforts to boost domestic consumption

Amid a prolonged real estate downturn and lukewarm domestic consumption, exports have once again emerged as a key driver of China’s economic growth. However, the surge in overseas shipments is a double-edged sword, as it has sparked retaliation among China’s trading partners concerned about protecting their own domestic industries and intensified simmering political frictions with the U.S. and Europe.

In the first half of 2024, net exports of goods and services contributed 13.9% to China's economic growth, boosting GDP by 0.7 percentage points — a stark contrast to the negative 11.4% contribution seen in 2023, according to the National Bureau of Statistics. This export boom propelled China’s trade surplus to a record $99 billion in June, triggering fears in many countries that an influx of Chinese goods may undermine their domestic industries.

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