China's export surge hides deepening domestic slump

Friday 30 January 2026 - 14:50

By: Dakir Madiha

China's export surge hides deepening domestic slump

In the bustling port city of Ningbo, just two hours south of Shanghai, China's economic paradoxes stand out starkly. The Ningbo-Zhoushan port handled 1.4 billion tons of cargo in 2025, holding its title as the world's busiest for the 17th year running. Yet a short distance up the Yong River, restaurants sit empty, construction sites idle, and middle-class residents watch their wealth erode amid plunging property prices.

A New York Times investigation published January 29, 2026, highlights this glaring divide: export factories hum at full capacity while local businesses struggle to stay afloat. "The main reason is that people simply don't have money," Sarah Jin, manager of a sanitary ware store in Ningbo, told the newspaper. In her building materials market, door sellers reported an 80 percent sales drop, with plumbing sales down 70 percent.

China posted a record trade surplus of nearly $1.2 trillion in 2025, with exports rising 5.5 percent to $3.77 trillion, according to mid-January customs data. This marked the first time the surplus topped $1 trillion, as manufacturers pivoted from a 20 percent drop in U.S. shipments toward Southeast Asia, Africa, Latin America, and Europe.

This export strength, however, conceals deeper structural woes. Fourth-quarter GDP growth slowed to 4.5 percent, the weakest pace in nearly three years. December retail sales edged up just 0.9 percent year-on-year, the feeblest advance since December 2022. "China's massive trade surplus reflects both its export prowess and the shortcomings of its growth model," said Eswar Prasad, an economics professor at Cornell University.

The property sector drags into its fifth year of crisis, with home prices falling for the 29th straight month in December. In Ningbo, fixed-asset investment plunged 21.4 percent in 2025, and municipal spending fell 5.6 percent after years of double-digit gains pre-pandemic. Local governments, reliant on land sales for revenue, are slashing budgets. Over a dozen provinces have lowered their 2026 GDP targets, signaling Beijing may trim its national growth goal for the first time in four years.

Meanwhile, China Vanke, one of the country's largest developers burdened by $50 billion in debt, narrowly avoided default this week with emergency aid from state-owned Shenzhen Metro. Ningbo's mayor, Tang Feifan, recently acknowledged the untapped consumer potential, citing insufficient follow-through on major industrial projects. As factory automation cuts jobs, locals scrape by. "Everyone complains about how hard it is to make money, to survive," one Ningbo resident told the Times.