China’s $1.2 Trillion Trade Surplus Risks Global Crisis as Export Push Meets Rising Barriers
Updated
Updated · Fortune · Sep 6
China’s $1.2 Trillion Trade Surplus Risks Global Crisis as Export Push Meets Rising Barriers
1 articles · Updated · Fortune · Sep 6
Summary
China’s export-led model is nearing a breaking point, Michael Froman warned, arguing that intensifying resistance to its cheap goods could abruptly shut off market access and trigger a wider economic crisis.
A $1.2 trillion 2025 trade surplus and a more than 20% jump in early-2026 surplus growth contrast with roughly 3.1% global GDP growth, underscoring how Chinese supply is outpacing world demand.
Chinese firms can price goods up to 30% below rivals, helped by an undervalued currency, state subsidies and overproduction that has left nearly a third of industrial companies operating at a loss.
Trump’s tariffs and new EU trade barriers show the pushback is already broadening, threatening to stall China’s export machine as protectionism rises across major markets.
A sharp slowdown in China would hit fragile companies, banks and local governments at home while cutting demand for commodities abroad, leaving the U.S. and its institutions to help manage the fallout.