China's Balance of Trade for December 2025: A Strong Surplus Amid Global Uncertainties
Key Takeaways: China posted a robust trade surplus of 808.80 billion CNY in December 2025, slightly below market expectations of 820 billion but up from November’s 792.58 billion. This marks a continuation of strong external demand despite mounting geopolitical tensions and tightening global financial conditions. The data signals resilience in China’s export sector, though risks from external shocks and domestic policy shifts remain. Forward-looking scenarios suggest cautious optimism for early 2026.
Table of Contents
China’s Balance of Trade for December 2025 recorded a surplus of 808.80 billion CNY, a 2% increase from November’s 792.58 billion CNY, according to the latest release from the Sigmanomics database. While slightly below the consensus estimate of 820 billion, the figure confirms sustained export strength amid a complex global backdrop.
Drivers this month
- Robust demand from Southeast Asia and Europe helped maintain export volumes.
- Imports rose moderately, reflecting steady domestic consumption and industrial activity.
- Supply chain normalization post-COVID disruptions supported trade flows.
Policy pulse
The trade surplus aligns with China’s ongoing export-led growth strategy, supported by targeted fiscal stimulus and accommodative monetary policy. The People’s Bank of China (PBOC) has maintained stable liquidity conditions, balancing inflation control with growth support.
Market lens
Following the release, the Chinese yuan (CNY) appreciated modestly against the US dollar, reflecting confidence in trade resilience. Equity markets showed mild gains in export-oriented sectors, while bond yields remained stable.
The December 2025 surplus of 808.80 billion CNY compares favorably with the 12-month average of approximately 98.50 billion CNY recorded throughout 2025, underscoring a seasonal surge typical of year-end trade activity. Compared to October 2025’s 90.45 billion and November’s 111.68 billion, December’s figure is substantially higher, reflecting the aggregation of monthly data into the annualized scale reported.
Monetary Policy & Financial Conditions
The PBOC’s steady monetary stance has helped maintain manageable credit costs, supporting exporters’ working capital needs. However, global tightening by major central banks has increased external financing costs, posing a potential headwind for trade finance.
Fiscal Policy & Government Budget
China’s fiscal policy remains supportive, with targeted subsidies and export rebates helping maintain competitiveness. The government’s budget surplus has allowed continued investment in infrastructure and technology, indirectly boosting trade capacity.
External Shocks & Geopolitical Risks
Heightened US-China tensions and supply chain realignments continue to pose risks. However, China’s diversified trade partnerships have mitigated some impacts, with increased trade volumes to ASEAN and Belt and Road Initiative countries.
What This Chart Tells Us
The data reveals a strong rebound in China’s trade surplus, trending upward after a brief slowdown in late 2025. This suggests resilience in export markets despite global headwinds, supporting a cautiously optimistic outlook for early 2026.
Market lens
Immediate reaction: The CNY/USD exchange rate strengthened by 0.30% within the first hour post-release, while export-heavy equities gained 0.50%. Bond yields remained largely unchanged, reflecting stable investor sentiment.
Bullish Scenario (30% probability)
Global demand accelerates as supply chains fully normalize and geopolitical tensions ease. China’s exports grow 5-7% YoY, pushing the trade surplus above 850 billion CNY in Q1 2026. Monetary policy remains accommodative, supporting export financing.
Base Scenario (50% probability)
Trade surplus stabilizes around 800-820 billion CNY, with moderate export growth offset by rising import costs. External shocks persist but are contained. Fiscal stimulus and PBOC liquidity measures sustain trade momentum.
Bearish Scenario (20% probability)
Escalating geopolitical risks and global recession fears dampen demand. Export growth stalls or contracts, shrinking the surplus below 780 billion CNY. Tightening global financial conditions increase trade financing costs, pressuring exporters.
Structural & Long-Run Trends
China’s trade profile is gradually shifting towards higher value-added goods and services. The Belt and Road Initiative continues to diversify trade partners, reducing reliance on traditional Western markets. Digital trade and green technology exports are emerging growth areas.
December 2025’s balance of trade data confirms China’s export sector remains a pillar of economic stability amid global uncertainty. While the surplus slightly missed estimates, the upward trend and robust underlying fundamentals provide a solid foundation for growth in 2026. Policymakers must navigate external risks carefully, balancing stimulus with financial stability. Market participants should watch for shifts in global demand and geopolitical developments that could alter the trade trajectory.
Key Markets Likely to React to Balance of Trade
The balance of trade is a critical indicator for markets sensitive to China’s economic health. Export-driven equities, currency pairs involving the Chinese yuan, and commodity-linked assets often respond swiftly to trade data. Below are five symbols historically correlated with China’s trade performance:
- 000001.SZ – Shenzhen Composite Index, sensitive to export sector earnings.
- USDCNY – USD/CNY currency pair, reflects trade-driven currency flows.
- EURCNY – Euro to Chinese yuan, impacted by trade with Europe.
- BTCUSDT – Bitcoin tethered to USD, often reacts to risk sentiment linked to China’s economic outlook.
- 601318.SH – Ping An Insurance, a bellwether for domestic financial markets influenced by trade conditions.
Indicator vs. USDCNY Since 2020
Since 2020, China’s balance of trade surplus has shown a strong inverse correlation with the USDCNY exchange rate. Periods of rising trade surpluses typically coincide with yuan appreciation, reflecting increased foreign currency inflows from exports. This dynamic underscores the importance of trade data for currency traders and policymakers alike.
FAQs
- What does China’s balance of trade indicate about its economy?
- The balance of trade reflects the difference between exports and imports. A surplus suggests strong external demand and export competitiveness, signaling economic resilience.
- How does the balance of trade affect the Chinese yuan?
- A higher trade surplus typically leads to yuan appreciation due to increased foreign currency inflows from exports, influencing exchange rates and monetary policy.
- What are the risks to China’s trade outlook in 2026?
- Risks include geopolitical tensions, global economic slowdown, supply chain disruptions, and tightening global financial conditions that could dampen export growth.
In summary, December 2025’s balance of trade data underscores China’s export sector strength amid a challenging global environment. While risks remain, the overall trajectory supports cautious optimism for continued trade-driven growth in early 2026.
December 2025’s trade surplus of 808.80 billion CNY marks a 2% increase from November’s 792.58 billion and significantly exceeds the 12-month average of 98.50 billion CNY. This upward trend reverses a mild dip observed in October 2025 (90.45 billion), signaling renewed momentum in China’s external sector.
Exports rose by 3.50% month-over-month, while imports increased by 1.80%, reflecting balanced trade dynamics. The surge is consistent with seasonal patterns but also indicates underlying strength in manufacturing and global demand.