Editor's note: Krzysztof Pelc, a special commentator for CGTN, is a professor of international relations at Oxford University, and an adjunct professor of politics and international relations at Korea University. The article reflects the author's opinions and not necessarily those of CGTN.

Every January, Western political commentators perform a familiar ritual, offering predictions about the year ahead. The forecasts are usually noisy and contradictory. But this year, one point of consensus has emerged. Analysts believe China will lean even more heavily on exports to sustain its growth, despite a softening of global demand and a hardening of geopolitical frictions.

Recent data have only reinforced that belief. Beijing just announced that its trade surplus reached roughly $1.2 trillion last year – the largest surplus ever recorded, even adjusting for inflation. Exports rose sharply across Europe, Southeast Asia, Africa, and Latin America, while imports remained largely flat.

Western concern is not a reflexive hostility to Chinese exports, nor a rejection of its industrial success. It is a concern over an imbalance in China's growth model, and a belief that such imbalances rarely remain confined within national borders. When Western analysts talk about China's export-led strategy, they usually have in mind three things.

First, investment is prioritized ahead of everything else. Capital keeps pouring into advanced manufacturing, infrastructure, and "strategic" industries, even when profits are uncertain and global markets already look crowded. Industrial policy reinforces this bias, nudging Chinese firms to replace foreign inputs with domestic ones, especially in sensitive areas like semiconductors and other high-tech components.

Second, the currency is kept on a short leash. The renminbi was allowed to fall during the pandemic and has been kept low since. A weaker renminbi makes Chinese exports more competitive and supports investment, but it also limits households' ability to buy foreign goods and services.

Third, and as a consequence of the first two, Chinese households are made to defer spending. Domestic spending makes up a stubbornly small share of the Chinese economy. Social insurance is limited, credit is kept tight, and wages do not keep pace with rising productivity. The result is weaker domestic consumer demand.

In response, a growing chorus of foreign voices – from French President Emmanuel Macron to International Monetary Fund Managing Director Kristalina Georgieva – has urged Beijing to encourage stronger household consumption through more generous social insurance, faster wage growth, and a stronger renminbi.

Why such sustained interest in the spending habits of Chinese households? The answer is not altruism, but prudence. When consumption is weak in an economy of China's size, the consequences do not stop at its borders. Chinese choices about saving, investment, and currency policy reappear elsewhere as import competition and financial imbalances.

Europeans speak candidly on this point because they have learned the lesson the hard way. Within the eurozone, Germany's persistent trade surplus was long celebrated as evidence of competitiveness and discipline. Over time, those surpluses became other countries' political crisis. What looked like technocratic efficiency produced resentment in other EU members; that resentment produced a policy backlash. The lesson drawn in Europe is not that surpluses are unjust, but that they are politically unstable.

The same logic explains the persistence of trade tensions between China and the United States. Since the 2010s, American debate has been shaped by research on the "China Shock," which documented how sudden import competition from China contributed to concentrated job losses in specific regions, with lasting economic and social effects.

That research did not argue for tariffs, which economists have long criticized; it called for more redistribution and government support. But those findings gave politicians an argument to justify increasingly punitive trade measures. When a country cannot deal with economic pain domestically, it often exports it abroad. That is what the current U.S. administration is doing through its import barriers.

The main concern in Western trade policy circles today is about how to manage persistent excess supply resulting from China's incredible industrial production. Export strength is itself a form of dependence. A country becomes reliant on the continued economic and political ability of other countries to absorb its excess capacity. The more dependent China becomes on foreign markets, the greater its stake in their domestic stability. The economic distress of distant regions, such as the American Rust Belt, thus becomes a Chinese concern.

The greater the pain felt in those regions, the greater the political pressure for trade barriers. If China keeps to the same growth strategy, the Western response is likely to follow a familiar pattern: more anti-dumping cases, more countervailing duties, renewed accusations of overcapacity, and the return of complaints over currency manipulation. Importantly, none of this requires hostile intent. It arises mechanically from imbalance.

Despite talk of stabilization in U.S.-China relations, the structural conditions for conflict are therefore worsening. Beijing can take steps to reduce the risk of a spiraling trade conflict, in ways that can also improve the lives of ordinary Chinese citizens: allowing for gradual currency appreciation; expanding the social safety net so households feel able to spend rather than save; and selectively slowing the most geopolitically sensitive export surges, in ways that can reduce the shock abroad.

Such steps would not signal weakness. They would signal confidence: that China's growth is mature enough to rest on the prosperity of its own citizens; that its success no longer depends on others absorbing its excess capacity; and that a large economy can generate wealth without generating backlash. Growth that is balanced at home is less likely to provoke resistance abroad – and therefore more likely to endure.

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