Where Is China’s Trillion-Dollar Trade Surplus Going?
China’s surplus is being recycled primarily through portfolio investment, cross-border banking flows, and Hong Kong’s capital markets.
The Shanghai Yangshan Deepwater Port Container Cargo Terminal. Credit: Adobe Stock
China’s export engine remains remarkably powerful. The country ended 2025 with the world’s largest-ever merchandise-trade surplus — $1.2 trillion — underscoring its enduring industrial competitiveness. But that money is not going where it used to go.
To be sure, that $1.2 trillion figure, which comes from customs data, is somewhat misleading. The balance of payments (BoP) — which records transactions between residents and non-residents of a country — shows a slightly smaller surpl
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