China has done exactly what development theory prescribes for emerging economies: export, upgrade and innovate. The economic results have led to a trade surplus in goods surpassing the $1 trillion mark from mere billions in the year 2000.

However, this success has drawn significant criticism from the West. The argument goes that China is swallowing a growing share of the world’s market for manufactured goods as China’s export volumes soar while its imports effectively flatline, dropping three per cent in dollar terms this year.

A recent Goldman Sachs report says that in the past, a 1pc increase in output in China would raise the rest of the world’s output by 0.2pc as it pulled in imports. In its new forecast, it concludes that the relationship has turned negative as China’s growth is being driven by its capability to further advance manufacturing competitiveness and boost exports. This is positive for other countries insofar as cheaper Chinese goods boost purchasing power. But that benefit is offset by the hit to their manufacturing sectors from Chinese competition.

The investment firm says China will grow about 0.6 percentage points a year faster over the next few years, which will reduce the rest of the world’s growth by 0.1 points a year. Two decades ago China’s economy was small enough that its trade surplus mattered little to the world, commentators say. Today China accounts for 17pc of global gross domestic product. Goldman estimates its current account surplus — the broadest definition of trade — will reach 1pc of world GDP by 2029, larger than any country at least since the 1940s.

Despite weakening global demand and rising trade frictions, China’s exports grew 7.5pc in the first 11 months of 2025 despite a 20pc drop in shipments to the US amid a tariff war.

China’s exports to the Association of Southeast Asian Nations, the European Union, and Belt and Road Initiative (BRI) economies rose 15pc, 10pc, and 25pc, respectively. The trade surplus exceeded $1tr, adding an estimated 1.5 percentage points to GDP, with China’s share of global merchandise trade projected to rise from 15pc to 16.5pc.

At the same time, China’s growth is increasingly anchored in domestic demand. Domestic consumption contributed 53.5pc of GDP growth in the first three quarters of 2025, underlining broad-based momentum across consumer spending, infrastructure and emerging industries. GDP grew 5.2pc in the first three quarters, supported by 6.8pc retail sales growth and 4.2pc fixed investment, including a 12pc jump in high-tech sectors.

Two decades ago China’s economy was small enough that its trade surplus mattered little to the world; today it accounts for 17pc of global GDP

Proactive policy easing — 50 bps rate cuts, a 10tr Yuan local-government debt swap, and a shift toward moderately loose monetary and active fiscal policy — has stabilised consumption and property markets. The International Monetary Fund now projects 5pc growth for 2025, while Beijing aims to lift consumption’s share of GDP above 60pc by 2030 under the common-prosperity framework.

Yang Fanxin, a researcher at the National Academy of Development and Strategy, Renmin University of China, brushed aside criticism, saying that China’s development has never been a zero-sum game.

She explained, “Tariffs alone led to an 11.9pc fall in China’s imports from the US. Such barriers have reduced global trade volume by over 0.3pc; removing them would lift global growth by 0.2-0.3 percentage points. Meanwhile, imports from Asean remain stable as China aims to raise imports from $2.2tr to over $3.5tr by 2030, expanding global market space by more than $1.3tr.”

Criticism that export-led growth comes at the expense of global growth is similarly misplaced, she maintained. “the rising export share is driven by high-tech products such as electric cars and semiconductor components, not by squeezing out others.”

China’s expanding trade surplus is not taking jobs away from others, Ms Yang responded to questions over email. “China makes up 17pc of global GDP yet delivers 31pc of global manufacturing value added. China’s 70pc drop in photovoltaic prices and EVs at one-third of US-EU prices help other countries cut carbon costs rather than hollowing out industries.”

Examples show this clearly: despite Germany’s auto troubles, Volkswagen, BMW and Mercedes-Benz joint ventures in China posted record profits in 2024–2025; Tesla’s Shanghai plant exported over 600,000 vehicles to Europe in 2025, supporting tens of thousands of jobs in ports such as Zeebrugge and Barcelona. “This is not ‘stealing jobs’ but ‘creating jobs’.”

Ms Yang contends that arguments that China’s high current account surplus must harm others ignore history: Japan 1.8pc in the 1980s, and Saudi Arabia and Norway often exceed 2pc without triggering global industrial decline.

According to her, manufacturing job losses in some economies stem from domestic policy choices and protectionism, not China. She said China’s strategy is not about isolation but strengthening domestic demand while reinforcing global value-chain integration. “By 2030, China expects to import over $8tr from developing countries, alongside large-scale workforce training under the BRI,” she shared.

Published in Dawn, The Business and Finance Weekly, December 15th, 2025