ISLAMABAD, September 16: China’s growing trade surplus and manufacturing strength have moved into focus following a G20 debate over global economic imbalances, exposing differences between Beijing and Washington over industrial policy, exports and the future of international trade.
At the meeting held under the US G20 presidency, Washington pushed for stronger international action against what it described as “excessive imbalances” and “non-market policies.” China opposed the language, arguing that such measures could provide justification for protectionism and disrupt global trade.
The debate comes after China recorded a global trade surplus of around $1.2 trillion in 2025, prompting renewed discussion among major economies over the factors behind the country’s export performance and its implications for the international trading system.
US Treasury Secretary Scott Bessent has argued that weak domestic demand and reliance on exports are contributing to global imbalances. Washington has also pointed to industrial subsidies and state support as factors contributing to the expansion of Chinese manufacturing capacity.
Dr Vaqar Ahmed, senior economist and Joint Executive Director at the Sustainable Development Policy Institute (SDPI) in Islamabad, offered a different assessment in comments to Wealth Pakistan.
“In my opinion, this surplus is driven overwhelmingly by industrial competitiveness and strategic openness, not by weak domestic demand or state handouts,” Ahmed said.
He argued that global demand for Chinese value-added products, combined with measures aimed at expanding access to China’s domestic market, offered another explanation for the country’s export strength.
Ahmed cited China’s tariff reductions and preferential market-access initiatives, including zero-tariff treatment extended to a number of African countries, as evidence of Beijing’s efforts to deepen international economic engagement.
“With zero-tariff access granted to 53 African nations and tariffs slashed on nearly 1,000 products, I see clear evidence that China’s market is a cooperation platform for the world,” he said.
“The surplus, in my view, reflects genuine global demand for Chinese value-added goods and China’s role as a stabiliser of trade, not a consumption shortfall.”
China has also sought to encourage imports through the China International Import Expo (CIIE), held annually since 2018, which Beijing promotes as a platform for international companies seeking greater access to its domestic market.
The competing assessments reflect a broader dispute over what is driving China’s manufacturing and export performance.
Beijing maintains that technological innovation, economies of scale, integrated supply chains and market competition underpin its industrial competitiveness. It rejects claims that subsidies alone explain its export strength and points to the use of industrial support policies by other major economies.
The United States, meanwhile, has increasingly used tariffs and domestic industrial incentives as it seeks to strengthen strategic manufacturing sectors and address what it regards as unfair trade practices.
These differences have become more significant as industrial policy, trade and national-security considerations increasingly overlap across major economies.
Ahmed said the absence of consensus at the G20 should be viewed as evidence of diverging approaches to international trade rather than the breakdown of the global economic system.
“The G20 deadlock, to me, highlights US-China divergence over trade philosophy, but I firmly believe that China’s continued stability and openness prove that global cooperation remains viable,” he said.
China has continued to expand economic engagement through trade agreements, tariff measures and commercial ties with developing economies, particularly countries across the Global South.
Ahmed said stronger access to the Chinese market could offer developing economies opportunities to increase exports, attract investment and participate more extensively in regional and global value chains.
For Pakistan and other developing economies, the wider debate is particularly relevant as governments seek export markets, investment and integration into international supply chains while navigating growing trade tensions among major economic powers.
The G20 dispute ultimately underscores a broader challenge facing the international economy: balancing domestic industrial strategies with an open trading system as governments increasingly turn to tariffs, subsidies and other measures to protect or strengthen strategic sectors.