A decade ago, China’s leadership argued that stronger domestic demand would lead to more imports and more balanced trade. Those speeches are still in the official archives. The trade data tell a different story.
China’s goods surplus did not move in a straight line. Between 2015 and 2018 it fell by 40%, from US$600 billion to US$359 billion. At the time, it was possible to believe that stronger domestic demand and a gradual rebalancing of the economy were becoming more than official talking points.
That interpretation did not survive the next seven years.
From 2019 onwards, the surplus resumed its climb, reaching US$1.2 trillion in 2025, the highest level on record.
The language, however, barely changed.
In 2015, Premier Li Keqiang promised a “more proactive import policy” and argued that China would buy more from the world as domestic demand grew. Two years later, he insisted that “China never goes after trade surpluses” because “unbalanced trade would not be sustainable.”
Those speeches remain in the official archive (here and here), even if the trade trajectory no longer resembles the destination they described. What changed was not the historical record but the centre of gravity of policy.
Over the following years, industrial capacity, and manufacturing scale became increasingly prominent. Consumption continued to grow, but not nearly fast enough to absorb the expansion of production. The gap increasingly flowed abroad.
There is no need to speculate about internal politics. China’s own public record is revealing enough. For a period, the language of rebalancing coexisted with trade data that appeared broadly consistent with it. Later, the language stayed largely the same while the data moved decisively in another direction.
Li Keqiang’s speeches were never erased. They simply became the archive of a China that many expected to emerge but never fully did.
Looking at today’s trade data, the question is no longer whether China once talked about balanced trade. It clearly did.
The more interesting question is when that language stopped describing where China was going and started describing where it had hoped to go.
China’s trade expansion under Xi Jinping has been driven increasingly by exports rather than by a parallel expansion of imports. That growing asymmetry helps explain why China’s record trade surpluses have become a defining feature of the global economy.
At the start of the Xi era, the export-import gap was not yet the story. By 2018, exports were about 13% above their 2013 level, while imports were about 9% above theirs. The real divergence came later.
The asymmetry becomes clearer when indexed to 2013. For every US$100 China exported at the start of the Xi era, it is now estimated to export almost US$200. For every US$100 it imported, it now imports US$164. The gap is not that imports have stopped growing. It is that exports have grown much faster.
China’s export machine expanded sharply between Jan-May 2025 and Jan-May 2026. Total exports rose by about $230bn.
The U.S. was the clear exception. China’s exports to the U.S. fell by $5bn. But the global export push did not weaken. It moved elsewhere.
The largest increases were recorded via Hong Kong, up $55bn, ASEAN, up $50bn, the EU, up $36bn, and Japan, South Korea and Taiwan, up $31bn. Africa, Latin America, India and Central Asia, Russia and Belarus, Oceania, and the U.K., Norway and Switzerland also absorbed more Chinese exports.
For the EU, the signal is direct. China exported $36bn more to the EU in Jan-May 2026 than in the same period of 2025. The EU still accounted for around 15% of China’s total exports, but that stability is not reassuring. A stable share of a larger export machine still means more Chinese goods arriving in the European market.
This is the mercantilist logic in the data. China is not adjusting by exporting less. It is expanding exports overall, while the destination mix shifts. When one large market buys less, others absorb more. The EU remains one of the main outlets.
The ECB’s latest Economic Bulletin connects the macro numbers to the trade story.
The euro area current-account surplus narrowed in 2025, and the ECB says the main country drivers were the United States and China. The U.S. story is complicated by services, income flows, multinationals and intellectual property. The China story is more direct: the euro area deficit with China widened mainly because the goods trade deficit became larger.
The ECB’s diagnosis links the widening deficit to China’s strong position in global supply chains, overcapacity, weak domestic demand and non-market industrial policies. Those factors have pushed Chinese producer prices down, making Chinese goods more competitive in Europe.
In 2026, the EU revised its customs nomenclature to improve the monitoring of specific goods.
China was not named. But the product selection was revealing: photovoltaic wafers, battery materials, wind-turbine blades, wind-tower sections and photovoltaic inverters, among others.
These are not random products. They sit in supply chains where the EU is trying to understand, and in some cases reduce, strategic dependence. The new codes make that dependence easier to measure.
One of them is solar inverters. Until 2025, they were mixed with other types of inverters. From 2026, inverters with maximum power point tracking functionality have their own code: CN85044084.
The result is hard to miss. Under the EU’s new solar-specific customs code, China accounts for virtually the entire import market.
EU wine exports to China keep shrinking. In Jan-Apr 2026, volumes fell another 11% year on year and were 70% below the level recorded in Jan-Apr 2021.
The comparison with the UK is the useful reality check. Since Brexit, EU wine exports to the UK have been broadly flat by volume. But because China has fallen so far, the UK has become much larger in relative terms. In 2021, the EU exported about four times more wine to the UK than to China. In Jan-Apr 2026, it exported about ten times more.
The U.S. decline appears sharper and began earlier, after Trump removed de minimis treatment for Chinese parcels. The EU line also turns down, even before new parcel-handling fees and tighter customs enforcement enter into force on 1 July. But the important point is the level:
By 2025 the EU had become the larger destination, and even after the estimated fall it remains well above the U.S.
China’s car export story is shifting. In Jan-May 2025, electric cars accounted for 59% of China’s electric and hybrid car exports. In Jan-May 2026, their share fell to 51.3%. Hybrids moved the other way, rising from 41% to 48.7%.
Electric cars still lead, but only just. The faster growth is now coming from hybrids.
The growth shows no sign of slowing. EU imports of electric buses from China increased from €160 million in 2021 to €905 million in 2025. Annualising January-April data points to €1.7 billion in 2026, a tenfold increase in just five years.
China imported 29% fewer barrels of crude oil in May 2026 than a year earlier. But the contraction was not evenly distributed.
Imports from Gulf producers fell 45% year on year, from 174 million barrels to 96 million barrels. Their share of China’s crude imports dropped from 52% to 40%.
The space was partly filled elsewhere. Russia’s share rose from 18% to 25%, while Latin America increased from 13% to 19%, with Brazil becoming China’s third-largest individual supplier by volume in May.
Bangladesh has urged China to help reduce the bilateral trade gap. The request is easy to understand from the data. China’s surplus with Bangladesh is not a one-year anomaly. It rose from $9.1bn in 2013 to a peak of $26bn in 2022, and was still $21.5bn in 2025. Over the past five years, for every $1 China imported from Bangladesh, it exported roughly $22 back.
Again, the asymmetry is visible. Bangladesh sells mainly to Western consumers in the EU and U.S., but buys mainly from China. Its export engine points west, while its import dependence points east.
China’s aviation kerosene exports turned sharply after February. In Mar-May 2026, exports fell to 3.3 million tonnes, down from 5.5 million tonnes in the same period of 2025. That is a drop of almost 40%.
The break coincides with the Gulf war shock and the disruption around the Strait of Hormuz. China appears to have pulled back fuel exports to protect domestic supply.
National Bureau of Statistics data for surveyed companies already show long working weeks. But this is not the full labour picture. China also has more than 200 million flexible workers, including 84 million workers in new forms of employment such as delivery riders, ride-hailing drivers and other platform workers. The real workweek may be even longer off the books.
