China sees record $1.19 trillion trade surplus in 2025 in spite of US tariffs • FRANCE 24 English

Key Concepts

• Trade Surplus (China): The amount by which a country’s exports exceed its imports.
• Semiconductors (H200): Integrated circuits used in electronic devices, particularly AI processors. Restrictions on their export are related to national security concerns.
• Equity Markets: Stock markets representing ownership in companies (Shanghai Composite, Hang Seng, Nikkei).
• Credit Card Interest Rate Cap: A proposed limit on the annual percentage rate (APR) charged on credit card balances.
• Bankruptcy Protection: A legal process allowing a company facing financial distress to reorganize its debts and operations.
• Foot Traffic: The number of customers visiting a physical retail store.
• Inventory: The goods available for sale.

Chinese Trade Trends & US-China Relations

China recorded its highest-ever trade surplus in 2025, exceeding $1.19 trillion USD – a 20% increase from 2024. Exports grew by over 5% year-on-year, while imports remained flat. Despite ongoing trade tensions with the US, which remains China’s largest trade partner, exports to the US decreased by 20% last year. This prompted Chinese exporters to focus on non-US markets, leading to growing trade imbalances and concerns about cheaper Chinese goods impacting other economies.

Cristina Gorgva, the head of the IMF, urged Beijing in December to reduce reliance on exports and stimulate domestic consumption, which has been stagnant. Chinese officials attributed low import volumes to US curbs on high-tech imports and pledged to further open the Chinese market in 2026.

US Tech Export Policy & China’s Response

The US government has granted Nvidia permission to sell its H200 semiconductor – its second most advanced AI processor – to China. This chip was previously restricted due to concerns it could provide a technological and military advantage to China. However, Reuters reported that Chinese customs agents have been instructed that these chips are not permitted, indicating Beijing’s commitment to developing its domestic chip industry.

Asian & European Equity Market Performance

Asian equity markets showed mixed performance on Wednesday. The Shanghai Composite traded lower, while the Hang Seng index in Hong Kong experienced gains. The Nikkei index in Tokyo reached record highs, driven by expectations of a snap election called by Prime Minister Say Takahuchi and anticipated pro-economy policies. European markets opened flat or with slight gains, with investors monitoring a meeting between US Secretary of State Marco Rubio and officials from Greenland and Denmark.

Trump’s Proposed Credit Card Interest Rate Cap

Donald Trump has proposed capping credit card interest rates at 10%, effective January 20th. The current average rate ranges between 19.65% and 21.5%. This cap could result in banks losing hundreds of billions of dollars in revenue annually. Banking executives, such as Jamie Dimon of JP Morgan Chase, have expressed concerns about potential negative consequences, but Trump dismissed these concerns, stating, “Paying 28% interest should be protected… I’ll help those people.”

Quote: “Paying 28% interest should be protected… we’re talking about for a one-year period, but when you have a bank… charging people 28, 32%, 30%, 31%, 1K’s 35%. No, I’ll I’ll help those people. That’s all right.” – Donald Trump

Saks Global Bankruptcy Filing

Saks Global, encompassing Saks Fifth Avenue, Burgdorf Goodman, and Neiman Marcus, filed for bankruptcy protection on Tuesday. The company’s financial difficulties stemmed from the $2 billion in debt incurred during the 2024 acquisition of Neiman Marcus. A decline in foot traffic during the pandemic and inventory shortages further exacerbated the situation.

The company owes significant amounts to luxury brands: Chanel ($136 million), Gucci owner Kering ($60 million), and LVMH ($26 million). This situation reflects a broader trend affecting high-end department stores, which face competition from e-commerce, mass-market retailers, and designer brands’ own boutiques. Saks Global has secured a $1.75 billion financing package from creditors to continue operations for the time being.

Quote: “They had laid out a plan that they thought would be suitable and achievable in order to be able to pay their bills and produce the kind of global group that they're seeking. However, that did not work out for them.” – Report on Saks Global’s bankruptcy.

Logical Connections & Synthesis

The report highlights a complex interplay of global economic factors. China’s trade surplus and shift in export markets are directly linked to US trade policies and concerns about technological competition. The US’s partial easing of restrictions on semiconductor exports to China is tempered by China’s continued investment in its domestic chip industry. Meanwhile, domestic US economic policy, as exemplified by Trump’s proposed credit card interest rate cap, aims to address affordability concerns ahead of elections. Finally, the bankruptcy of Saks Global illustrates the challenges faced by traditional retail in adapting to changing consumer behavior and increased competition.

The overarching takeaway is that the global economy is undergoing significant shifts, driven by trade tensions, technological advancements, and evolving consumer preferences. These shifts present both opportunities and challenges for businesses and policymakers alike.