Ding Heng
US Treasury Secretary Scott Bessent has taken advantage of the recent G20 Finance Ministers’ meeting to target China over the trade imbalance issue, urging G20 members to re-examine their terms of trade with China. First and foremost, rallying G20 members over this issue appears to be anattempt to shift blame away from Washington. After all, no one needs a reminder about the global economic shadow cast bythe Trump administration’s tariffs and war on Iran.
In the US and, for that matter, certain European nations, it is politically convenient to blameChina’s export strengthfor their own industries’ structural challenges.However, doing somisses two important points. First,China doesn’t want to rely on exports to drive itseconomic growth. Second, instead of derailing the world’s sustainabledevelopment, China’s exports of goods and services contribute positivelytobuilding a durable globaleconomy.
In many ways, it is questionable to argue that China has deliberately pursueda massive trade surplus in its industrial policy.Beijing has demonstrated a clear political will to buy more from the rest of the world. China is one of the few countries worldwide that run a national-level trade expo focused on imports. As a matter of fact,discrepancy between an economy’s exports and imports is fundamentally driven by its savings and investment, rather than by tariff and industrial policies.
According to the World Bank, China’s gross domestic savings accounted for 43.3% of its GDP in 2024, the highest among the world’s major economies. This high savings rate means that there is plenty of money within China’s financial system to finance its industrialproduction.When China saves more money than it uses fordomestic investment, itis unableto absorb all the goods and services it produces, thereby exporting more than it imports.
By the same token, the US has a persistent trade deficit becauseits domesticinvestment exceeds its savings. The US national savings rate wasjust 18.5% in 2024, less than half of China’s rate. Therefore, it is nosurprise that, despitePresident Donald Trump’s double-digit “Liberation Day”tariffs on imports from most countries, the overall trade deficit of the US only slipped slightly in 2025.
Ultimately, a reduction in China’s trade surplus needs to come from structural reforms that address the gap between its savings and investment. This is what China is already doing byseeking to boost domestic demand and direct more resources to households.China’s moves to improve public medical care and other aspects of social safety net are also relevant endeavors in the same direction.China’s strong export figures in recent years might lead to a perception that the world’s second largest economy continues to rely heavily on exports. In fact, domestic demand contributed to over 85% of China’s growth from 2021 to 2024.
In another metric, a current account surplus happens when an economy earns more money from exports, foreign investments, and international transfers than it spends on imports and payments to other economies. In the case of China, its current account surplus has narrowed from a peak of nearly 10% of GDP in 2007 to around 3.7% in recent years. In other words, China’sinternational economic engagement isnow much more balanced than it was two decades ago.
To those who don’t like China, it is an appealing narrative to frame China’s strong performance in exports as dumping overcapacity, so much so that they tend to neglect the fact that a large part ofshipments of Chinese goods is driven by actual demand.
The globaldemand for Chinese renewable energy products is certainly real. The devastating flood wave hitting Nepal and China is the latest warning about the urgency to tackleclimate change.Through innovation and economies of scale, China has made green energy technologies widely available and much less costly across the world. From 2021 to 2025, China’s exports of wind turbines and solar panels helped reduce around 4.1 billion tons of carbon emissions in other countries. By some estimate, you need to plant more than792 billion treesto achieve the same level of emissions reduction. But on the other hand,climate scientists almost unanimously agree that the world’s existing green energy capacity is not yet enough to meet global climate goals. From the perspective of accelerating global green transition, a crucial question for now is not whether China is selling too many solar panels to the world, but how to fill the remaining gap in global green energy capacity.
Gone are the days when China justplayed the role of a final assembler ofconsumer products. Compared to the immediate period after China joined the World Trade Organization in 2001, China in the present day is much more deeply involved in global supply chains.As of 2025, China had remained the world’s largest exporter of intermediate goods for 12 consecutive years.Intermediate goods also take up an increasingly bigger share in China’s exports, rising from 41.9% in 2017 to 47.4% in 2025. Such a scenario means that, in many cases, components from Chinese suppliers are playing a key supportive role in other economies’ industrial activities. These products could be anything ranging from circuit boards in a smart phone factory in Southeast Asia to headlights used in a European auto plant. While some countries worry about the competition from Chinese goods, without imports from China their own industriescould face costly disruptions.
Of course, this is not to suggest that China’s exports won’tend up undermining other economies. Each case in international trade can be unique in some sense, and each individual economy isjustified to express its own legitimate concern and talk to China on specific issues. However, it is way too simplistic and one-sided toportray China as a giant monster imposingindustrial overcapacity onothers. Such rhetoricdoesn’t help address any perceived problem in trade with China.
—The author is a Beijing-based radio host and political analyst.
