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A Foreign Policy analysis has warned that China’s export-driven economic model and record trade surplus could pose risks to the global economy. The article said China’s 2025 trade surplus reached nearly $1.2 trillion, creating pressure on manufacturers worldwide. It called for gradual economic rebalancing to prevent a potential crisis caused by industrial overcapacity.

New Delhi, Aug 14: China’s relentless policy of driving exports and widening its trade surplus, by any means, has hit the manufacturing sector of advanced economies such as the United States and those in Europe, as well as developing countries in Africa, Asia, and Latin America, according to an article.

China has completely ignored the global consensus that its overcapacity is harming other countries. However, now this problem is approaching a breaking point. And if that breaking point comes, the consequence could be a global economic crisis at a time when governments are particularly ill-equipped to manage the fallout, the article in Foreign Policy magazine laments.

Over the past two decades, China has established the largest trade surplus in recorded history. In 2025, this reached nearly $1.2 trillion, growing at three times the rate of global goods trade. This is politically and structurally unsustainable—creating an increasing and underappreciated risk to the entire global economy, according to the article by Michael B. G. Froman.

When the Chinese economy was much smaller, a strategy based on driving export growth at two or three times the rate of overall global economic growth was possible because there was sufficient global demand to absorb its exports. Today, however, China has a much larger economy and cannot continue on this trajectory without eventually running out of customers.