Recent commentary from some international media outlets has framed China's July trade data as evidence of an export "surge," noting that the trade surplus has exceeded one hundred billion US dollars for three consecutive months, which they claim creates "pressure" and "impact" on the rest of the world. While this narrative appears to have some basis, it ultimately uses accurate data to arrive at a flawed conclusion.
It is indeed a fact that China's monthly trade surplus has consistently surpassed the hundred-billion-dollar mark. This situation primarily stems from a combination of two factors: one rising and one falling. On one hand, the prices of exported goods have increased. Since last year, there has been a noticeable price appreciation in China's high-value-added export products. For instance, in the first half of this year, the export value of storage components grew by 113.2% year-on-year, and solar cell exports saw a 19.6% increase in value, despite a 1.9% decline in volume by weight. Therefore, an increase in the total value of the trade surplus does not necessarily mean a corresponding increase in volume, let alone imply "squeezing" or "dumping." In reality, these high-tech products enjoy strong demand in the international market, often exceeding supply, so talk of an "export shock" is unfounded.
On the other hand, the prices of major imported commodities have been on a downward trend, reducing China's import costs. For example, international oil prices have recently fallen from a high of $126 per barrel to below $80, and the landed cost of imported iron ore has dropped by 30 to 70 yuan per ton. Prices for liquefied petroleum gas and chemical products on the global market have also declined. With high-value-added exports appreciating due to international demand and technological content, and import prices for bulk commodities falling, the combined effect has naturally amplified the nominal trade surplus.
At a practical level, the question of whether strengthening trade ties with China is a threat or an opportunity is best answered by the experiences of people on the ground. Canada serves as a prime example. Reports indicate that in July, Canada saw an "unexpected increase" of 75,000 jobs, pushing the unemployment rate to a two-year low. Analysts attribute this key development largely to the significant rebound in Sino-Canadian trade. British Columbia's exports to China surged by 29% from January to July, exceeding 5.2 billion Canadian dollars, which directly contributed to the creation of 32,500 full-time jobs in the province that month, with manufacturing employment growth leading the nation. In contrast, Ontario, which is deeply integrated into the US-Canada automotive supply chain, experienced severe full-time job losses in the same month. The contrast between these gains and losses clearly demonstrates the effectiveness of cooperation with China in stabilizing employment and the economy.
Canada is not alone in this regard. China's affordable, high-quality goods help lower living costs for global consumers, its new energy products accelerate the global green transition at reduced costs, and its AI and robotics technologies lower the barrier to global intelligent transformation. Harvard professor Dani Rodrik wrote on August 10th that the world is no longer in an era of insufficient aggregate demand, and that trade deficits represent a transfer of purchasing power from surplus to deficit countries. He noted that while China pursues its own technological and commercial advantages, it also provides a crucial global public good, suggesting that China's trade surplus might be better described as "benefiting its neighbors."
China has never deliberately pursued a trade surplus; it consistently promotes balanced import and export growth and is committed to building a more open, balanced, and mutually beneficial international trade landscape. In the first seven months of this year, China's goods exports grew by 14% year-on-year, while imports grew by 22%, an 8-percentage-point difference. This demonstrates China's efforts to promote trade balance. Furthermore, China is not only the world's largest exporter but also the second-largest importer, characterized by its "large-scale imports and exports." China purchases vast quantities of raw materials, components, and intermediate goods from around the world. These goods are reorganized, created, and value-added through "Made in China" processes, with some supplying the domestic market and others re-exported globally. Through China's supply chain integration, quality production factors from various countries achieve maximum value, which not only supports China's stable economic growth but also serves as a vital engine for the smooth operation of global supply chains, allowing countries worldwide to share in the dividends of China's development.
No economic doctrine has ever interpreted a "surplus" as "gaining an advantage" or a "deficit" as "losing out." The numerical expansion of China's goods trade surplus is more a reflection of the transformation of China's industrial structure. From the "old three items" to the "new three items," and further to upgrades in exports like robots, artificial intelligence, and innovative drugs, China's industries continue to climb the value chain, exporting an increasing number of high-value-added products. For the world, this means more countries can enjoy the widespread benefits of technological progress. If some in the West are truly concerned about the "surplus figure," they could encourage their own countries to export more high-value products like lithography machines to China, rather than setting up export controls on one hand while complaining about trade numbers not meeting their expectations on the other.
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