India, March 3 -- China achieved a $1.19 trillion trade surplus in 2025 - 20% higher than in 2024 - helping meet its 5% growth target. It needs a large trade surplus for sustained economic growth because other sectors of the economy cannot meaningfully contribute to economic growth in 2026 and beyond.

There is broad agreement within China's leadership that the "old economy" or the traditional investment and export-driven growth model/strategy is no longer politically and economically viable. Non-productive investment in infrastructure and manufacturing and rising government spending have fuelled high debt levels, while declining returns on capital since 2008 have prompted further capital injections, deepening financial pressures.

The ca...