China's trade surplus surged past one trillion dollars for the first time, revealing how exporters have successfully redirected shipments away from the US amid persistent geopolitical and trade frictions.

The figure points Beijing’s ability to find new demand across emerging markets, Europe and parts of the Global South, even as Washington tightens restrictions on Chinese goods and technology, Bloomberg reports.

For President Xi Jinping, the achievement caps a year that began under heavy pressure. US-led curbs on advanced technology threatened to choke off growth engines, while a deepening property slump dragged on confidence. Yet China’s technology sector proved more resilient than many expected.

Artificial intelligence firms continued to scale despite export controls, and domestic chipmakers accelerated listings as capital markets opened channels to fund self-reliance. Together, these dynamics helped stabilize growth without the sweeping, debt-fueled stimulus Beijing once relied on.

Exports did much of the heavy lifting, allowing China to stay near its around five percent growth target. Manufacturers pushed further up the value chain, exporting more electric vehicles, batteries and high-end machinery rather than low-cost consumer goods. That shift helped cushion the blow from weaker demand at home.

But the underlying picture is deteriorating. Fixed-asset investment is on track for its first annual contraction since 1998, signaling that companies are pulling back amid uncertainty over demand and profits. Retail sales growth has slowed to its weakest pace outside the pandemic, reflecting fragile household confidence.

Meanwhile, home prices continued to fall in November, extending a property downturn that has eroded household wealth, strained local government finances and weighed on banks with no clear end in sight.

Facing these headwinds, Beijing is preparing a policy pivot. The Ministry of Finance said the government will broaden its fiscal spending base in 2026, channeling more targeted investment into advanced manufacturing, technological innovation and human capital development. Rather than reviving the old model of property-driven growth, policymakers are signaling a longer-term bet on productivity, skills and strategic industries even if that means slower, more uneven growth in the short run.