China's Export Boom: Hidden Risks & Buyer Strategies
When you look at the monthly trade data released by China's Customs, a steep upward curve shows a record trade surplus; but when you walk into a medium-sized electronics factory in the Pearl River Delta, production lines are half idle, and the owner is worried about orders after the Chinese New Year.
This contradiction is playing out in reality: China achieved an annual goods trade surplus approaching $1 trillion in 2025, with monthly data consistently high at $90-110 billion, making the export engine appear robust. At the same time, a large number of factories are facing challenges like fragmented orders and insufficient capacity utilization.
01 Macro Data: The Structural Truth Behind the Prosperity
China's latest trade data reveals a complex picture. According to General Administration of Customs statistics, China's goods trade surplus reached $105 billion in November 2025, remaining high for six consecutive months. The cumulative annual surplus is projected to exceed $980 billion, hitting a record high.
Behind this number lies a structural reality: the surplus is not evenly distributed across all manufacturing sectors but is highly concentrated in a few industries. Exports of products represented by the "new three" — electric vehicles, lithium batteries, and solar cells — grew by over 40% year-on-year.
The strong performance of these capital-intensive, policy-supported industries contrasts sharply with the experience of China's overall manufacturing sector. This divergence is key to understanding the current contradictions in the Chinese market.
02 Surplus Analysis: The Sectors Propping Up China's Foreign Trade
Understanding the sources of China's record surplus requires examining three key driving factors. Three categories of products — electrical equipment, machinery, and vehicles — form the main body of the surplus, collectively contributing over $850 billion.
These industries mostly benefit from industrial policy support, economies of scale, and long-term technological accumulation. For example, China possesses a complete industrial chain in the new energy vehicle sector, forming a cost advantage from battery materials to vehicle manufacturing that is difficult to replicate.
Simultaneously, market diversification strategy has played a crucial role. Against the backdrop of trade barriers in traditional European and American markets, Chinese exports have successfully pivoted towards ASEAN, Belt and Road Initiative countries, and emerging markets. This market-shifting capability has provided room for surplus growth.
03 Factory Dilemmas: Collective Anxiety at the Micro Level
Contrasting with the macro data is the widespread anxiety at the factory level. As shown by the Purchasing Managers' Index (PMI) for manufacturing, the PMI for small enterprises was 47.2% in November 2025, remaining below the boom-bust line for several consecutive months.
Behind this data lies the common reality factories face: reduced order sizes, with average order value dropping by about 25%; and extended decision cycles, with the time from customer inquiry to order placement increasing by 15-20 days.
These changes directly lead to decreased factory capacity utilization. In traditional manufacturing hubs like the Pearl River Delta and Yangtze River Delta, production line load rates at many medium-sized factories hover around 70-75%, far below the healthy level of 85%.
For international buyers, this micro-level reality means challenges to supply-side stability. Factories with idle capacity may encounter issues with quality control, on-time delivery, and supply chain transparency, which directly translate into procurement risks.
04 Analysis of the Divide: Market Differentiation Between Aggregate and Structure
The key to understanding the Chinese market lies in recognizing the multiple splits between aggregate and structure, macro and micro. This differentiation manifests across several dimensions, constituting the complexity of the current procurement environment.
From an industry dimension, the fortunes of capital-intensive "new three" sectors differ markedly from those of traditional consumer goods manufacturing. From an enterprise scale dimension, leading companies and small-to-medium factories face different market pressures. From a time dimension, quarterly trade data and factories' daily order flows follow different rhythms.
This structural differentiation leads to a procurement paradox: against the backdrop of positive overall export data, the bargaining power of most factories is declining. To maintain operations, they are more likely to accept orders with苛刻 conditions, further squeezing profit margins and resources for quality control.
05 Procurement Strategy: Finding the Balance Point in a Differentiated Market
Facing a structurally differentiated market, international buyers need to adjust their strategies and rebuild supply chain balance across the following three dimensions: precise supplier assessment, flexible cooperation models, and preemptive risk prevention and control.
First, buyers should establish a multi-dimensional supplier evaluation system that goes beyond traditional cost and quality metrics. Pay special attention to the factory's capacity utilization rate, employee stability, cash flow health, and management capability of secondary suppliers.
Second, adopt a phased cooperation framework: break down large orders into "core guaranteed volume + flexible adjustment volume," ensuring basic supply while retaining elasticity to adjust based on market changes. Simultaneously, establish transparent communication mechanisms to promptly obtain first-hand information on the factory's operational status.
Finally, implement proactive risk prevention and control. This includes increasing the frequency of unannounced factory visits, setting checkpoints at key production stages, and establishing a raw material traceability system. When necessary, consider引入 third-party supply chain audit services.