China to import more to balance trade as surplus causes friction with partners

BEIJING – China will boost imports to promote more balanced trade, its Commerce Minister said, acknowledging how a surging surplus which helped prop up its economy has become a bugbear abroad.

Beijing had taken note of its trading partners’ views and opinions on China’s near US$1.2 trillion (S$1.54 trillion) trade surplus in 2025, Mr Wang Wentao said to reporters on March 6. “Our next step is mainly to promote the balanced development of trade.”

China will “stabilise exports while expanding imports”, he said, adding that the world’s second-largest import market is “proactively open”.

Mr Wang was speaking at a press conference on China’s economic priorities – which range from rebalancing foreign trade to boosting domestic consumption and developing frontier technologies – on the sidelines of the Two Sessions, which are annual meetings of lawmakers and government advisers.

China has relied on exports to power growth, and buys much less from the world than it sells.

In the face of punishing tariffs levied by the United States in 2025, China sold more of its goods to other countries, with outbound shipments growing 5.5 per cent in 2025 while imports stayed flat.

That imbalance has drawn flak, including from French President Emmanuel Macron, who has threatened tariffs if China does not move to rebalance trade.

Mr Wang said that China would import more agricultural products, high-quality consumer goods, advanced technology equipment and key components. It would also issue a report assessing certain countries’ ability to export to China, and help them raise their capacities to do so.

China has yet to release trade figures for 2026, but Mr Wang said its performance in the first two months of the year continued the momentum from 2025 and was “better than expected”.

However, he added that recent escalations in geopolitical conflicts have disrupted trade and supply chains, making the situation more uncertain.

“To maintain China’s access to other markets, China must address its trade partners’ concerns about trade imbalances,” said Ms Guo Shan, a partner at consultancy Hutong Research in Shanghai.

“China’s imports have been recovering since last summer, and a key driver is RMB (renminbi) appreciation, which we think will continue this year and beyond,” she added.

The more than two-hour-long press conference also saw officials outline China’s strategy for boosting consumption in 2026 as part of an ongoing move to rebalance the export-driven economy and insulate it from external shocks.

Expanding domestic demand is China’s top priority for the year, according to an annual government work report released on March 5.

Finance Minister Lan Fo’an said that 2026’s drive to bolster spending will “exceed last year’s efforts” with a new 100 billion yuan (S$18.6 billion) fund to spur investment and consumption, and the extension of a popular consumer goods trade-in programme.

In 2026, the authorities have allocated 250 billion yuan to extend a trade-in programme to subsidise the buying of not just green but also smart products that Mr Wang called “an upgrade” of previous years’ focus on mainly eco-friendly goods.

Mr Wang said that the change will also “inject vitality into new industries and emerging sectors”.

In 2025, the government earmarked 300 billion yuan for the trade-in programme that started in 2024. Its effects started tapering off in May 2025, with growth in retail sales having declined since.

Specific details on how the new fund will be used to spur spending have yet to be released.

Mr Wang said a pilot to explore growing consumer trends such as emotional spending will be carried out in 50 cities, including Beijing.

These experiments are also meant to have “broad reach and high visibility” to create buzz and draw more consumers, he added.

Chinese consumers have been reluctant to open their wallets, as a prolonged slump in the real estate sector – where many store their wealth – dents confidence. Retail spending in China grew 3.7 per cent in 2025, and this slowed to 0.9 per cent at the end of the year.

More will also be done to boost the services sector, and to expand consumption in China’s less-developed cities, Mr Wang added.

The latter is meant to unlock the “untapped potential” in China’s third- and fourth-tier cities, given that they account for more than 70 per cent of the national population and 60 per cent of gross domestic product and retail sales in the country, Mr Wang said.

Developing core commercial districts and pedestrian streets, and attracting domestic and international brands to open flagship stores will be among steps taken to grow spending there.

Mr Wang said spending trends that have emerged over the recent Spring Festival – or the Chinese New Year – have lent credence to the latest strategies.

He pointed to how offline spending had “for the first time in recent years” outpaced online spending by about 4 percentage points, thanks to “a rich festive atmosphere, tech-driven trends and vibrant markets”.

Domestic travel in China over the nine-day festival in February hit a high with 596 million trips – up 95 million from 2025’s eight-day break – and spending surged 126 billion yuan to 803 billion yuan.

Robots performing at temple fairs and shopping streets, and drone performances were big draws for visitors, Mr Wang said.

“These highlights underscore the fresh dynamics and robust vitality of China’s domestic market.”