CHINA's trade surplus is not driven by subsidies or an undervalued exchange rate. Instead, it reflects a combination of structural factors, including stronger manufacturing competitiveness, greater import substitution, the restructuring of global supply chains and the expanding presence of Chinese firms in overseas markets, economists said at a recent forum in Beijing.
At the 2026 Tsinghua PBCSF Chief Economists Forum, Wang Tao, senior research adviser at UBS Investment Bank, said that China's trade surplus has multiple underlying causes and should not be attributed to subsidies or an undervalued exchange rate.
One key factor, Wang said, is the continued strengthening of China's manufacturing capabilities. Products that China was previously unable to produce can increasingly be manufactured domestically, often at greater efficiency and scale.
Import substitution is another important factor. Advanced equipment and instruments that China once relied on imports to obtain can, in some cases, now be produced domestically. Meanwhile, in third-country markets, some developing economies that previously sourced products from elsewhere are increasingly able to import similar goods from China, Wang said.
She added that China's trade surplus with emerging market economies has accounted for an increasingly large share of the country's overall surplus over the past two decades. This trend is closely linked to the restructuring of global supply chains.
The growing number of Chinese companies expanding overseas has also contributed to this shift. Their expansion overseas represents an extension of China's supply chain system into Asia and other parts of the global economy, Wang said.
Robin Xing, chief China economist at Morgan Stanley, said the debate over global imbalances should not focus solely on China.
"Whenever the issue of global imbalances is raised, many people tend to focus on China. I believe that looking at it solely from this perspective is certainly one-sided. Global imbalances are a shared global problem," Xing said.
In his view, three factors could shape the continued evolution of global imbalances: the path dependence of countries' macroeconomic policies, the amplifying effects of technological revolutions across economies and emerging geopolitical challenges.
"Therefore, addressing global imbalances requires a collective effort," he said.
Ju Jiandong, chair professor at Tsinghua University PBC School of Finance and director of the Center for International Finance and Economics Research at Tsinghua PBCSF, said global trade imbalances are a consequence of the international division of labor.
China's manufacturing sector, Ju said, does not produce solely for the domestic market; it also supplies goods to consumers and businesses around the world.
From a theoretical perspective, the international division of labor itself does not necessarily require correction. However, the pressure facing manufacturers in the United States and Europe has increasingly been viewed through the lens of national security, Ju said.
Guan Tao, chief economist at Huafu Securities, emphasized that China has channeled a significant portion of its trade surplus back into the global economy through capital outflows and outbound direct investment.
China's outstanding ODI assets now account for about 30 percent of its total foreign assets, a proportion close to that of its foreign exchange reserve assets, Guan said.
"In other words, China has not simply accumulated the proceeds from its trade surplus. It has put those funds to work through overseas investment, supporting local development in countries around the world," he said.
Yao Yang, professor and dean of the Dishui Lake Advanced Finance Institute at Shanghai University of Finance and Economics, said the biggest challenge facing the global economy remains development.
Around 80 percent of the world's population continues to live under difficult economic conditions and still seeks sustained economic growth, Yao said.
"From the perspective of global development, China's production capacity is far from excessive. This is particularly true as we confront climate change. China's current major export products are closely related to the global effort to combat climate change," Yao said. - China Daily/ANN
