All Things Policy Taking Stock of China Shock
Aug 25, 2025
Amit Kumar, a colleague at the Takshashila Institution and expert on China's economy, discusses the intriguing paradox of China's rising export figures amid economic slowdown. He highlights the ongoing shift towards domestic consumption and the challenges this presents. Amit warns about potential goods dumping from China as it tries to rebalance its economy. He critiques the drop in household consumption over decades and emphasizes the need for stable growth through increased consumer spending, all while examining China's lasting influence on global trade.
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China's Trade Share Has Fallen Since Its Peak
- Trade and exports' share of China's GDP have fallen sharply since 2002–2013 peak years.
- This shows China is past its old export-led growth era despite rising export figures in raw terms.
Percentages Reveal Structural Change
- Looking at trade and exports as percentages of GDP gives clearer insight than raw export growth.
- Percentage metrics reveal structural shifts that headline export numbers can obscure.
China's Surplus Still Packs Global Punch
- China still exports a large trade surplus equal to roughly 4% of GDP, matching its peak-era global impact.
- So even with lower trade/GDP ratios, China continues to offload a comparable surplus onto world markets.