China Reaches Record Trade Surplus, Raising Alarm Abroad

Vast fleets of electric cars. Huge numbers of household appliances. And a seemingly endless supply of toys, clothing and other products.

China’s already formidable exports surged in June, China’s customs administration reported on Friday. But imports shrank, with Chinese companies and households becoming more cautious about spending money. The result was a record monthly trade surplus of just over $99 billion.

For the Chinese government, the ever-widening trade surplus is good news. Consumers in distant markets are buying many of the goods that Chinese households no longer want or cannot afford. Exports help keep factories open in China, and provide the money for even more factories under construction as part of a national strategy to expand industrial output.

But China’s soaring trade surpluses have prompted alarm in many foreign capitals. Officials around the world worry that exports from China will displace their own industrial output, forcing factories to close and hurting economic growth. In recent weeks, governments in the United States, the European Union, Brazil, India, Turkey and elsewhere have been raising tariffs or imposing new ones on manufactured goods from China.

China’s trade surplus last month broke a record set in July 2022, when the country’s factories and ports were racing to catch up with global demand after a stringent Covid-19 lockdown in Shanghai had crippled output throughout much of central China.

Millions of people in China are now looking for ways to save money in response to a real estate downturn. Apartments and other properties represent 60 to 80 percent of household savings in China, an unusually large proportion by international standards. So falling apartment prices have had an outsize effect on consumer spending. A housing crisis that began three years ago because of overbuilding has already led to dozens of developers defaulting on debts.