China's Record $1.189 Trillion Trade Surplus Boosts Risk Appetite and Revives Stock Market Momentum

Beijing | EcoPulse24

China's economy received dual support from both external trade and the financial markets, as the trade surplus widened to a historic high and domestic stocks rebounded on strong trading activity and expectations for additional supportive policies. This convergence between trade and equities has bolstered sentiment at the start of the year, despite ongoing trade-related pressures with the United States.

On the trade front, China achieved a record trade surplus of $1.189 trillion in 2025, with exports rising 5.5% and imports remaining steady. In December alone, the surplus reached $114.1 billion, the seventh time this year that monthly surpluses exceeded $100 billion. Monthly exports jumped 6.6% year-on-year after a 5.9% increase in November, surpassing the 3.0% forecast and marking the fastest growth since September, driven by increased shipments to markets outside the US, particularly ASEAN and the EU. Imports grew 5.7%, outpacing the 0.9% estimate for the fastest pace in six months. Meanwhile, the trade surplus with the US narrowed to $23.25 billion from $23.74 billion in November.

In equities, the Shanghai Composite Index rebounded 0.9% to surpass 4,170 points, while the Shenzhen Composite gained 1.7% to reach 14,400 points, reversing previous session losses and nearing multi-year highs. Improved trading volumes across Chinese exchanges at the start of the year reflect growing risk appetite amid bets on further policy support and advances in AI technology. Major global investment banks have also turned more positive on Chinese equities, citing attractive valuations, supportive sector policies, and robust earnings momentum. High-growth tech stocks led the rally, including Shanghai Stonehill (+8.5%), BlueFocus Intelligent (+6.8%), Guangzhou Haige (+10%), Easy Click Worldwide (+15%), and East Money Information (+2.8%).

Analysis:
The intersection of a record trade surplus and a clear stock market recovery highlights China's increasing reliance on external momentum to offset persistent domestic pressures. Strong exports give policymakers more room to support markets, while rising trading volumes indicate improving risk appetite and expectations of further supportive interventions. However, the outlook remains dependent on US trade policy developments and Beijing's ability to translate external momentum into more balanced domestic recovery.