Research on the Impact of Trade Surpluses on China's Economic Growth and Pathways to Balance

Since China's reform and opening-up in 1978, its international trade has experienced rapid growth, with a long-term trade surplus becoming a prominent feature against the backdrop of sustained economic expansion. In particular, its bilateral trade with the United States has consistently been in a trade surplus. This paper examines the relationship between the trade surplus and China's economic growth through a literature review, aiming to systematically analyse the dual effects of the trade surplus. The research findings indicate a positive correlation between the trade surplus and China's economic growth. The trade surplus drives economic growth by boosting external and internal demand, accumulating foreign exchange reserves (enhancing the ability to stabilise exchange rates and ensure import security), and strengthening government investment in infrastructure, human capital, and strategic industries. However, trade surpluses also pose risks, including resource misallocation leading to industrial imbalances, increased vulnerability to global shocks due to overreliance on external demand, and pressure on the renminbi to appreciate, which weakens export competitiveness.