Recent remarks by U.S. officials accusing China of “flooding” global markets with exports and calling for a “rebalancing” of its economy are merely recycled arguments long used against China. These claims disregard the profound changes taking place as China advances toward high-quality and sustainable economic development.
This so-called “rebalancing” claim reflects a Cold War mentality and zero-sum thinking, driven more by political motives than any sound economic logic.
In reality, domestic consumption has become the primary driver of China’s economic growth. In the first half of 2025, internal demand contributed 68.8 percent to the GDP growth, with consumption alone accounting for over half. Last year, consumption contributed 44.5 percent, surpassing net exports (30.3 percent) and investment (25.2 percent) as the main growth engine.
At the same time, China’s trade structure continues to improve. Total goods trade rose 6.1 percent year-on-year in the first half of the year, with general trade, characterized by longer value chains and higher added value, accounting for 65 percent of total imports and exports. Mechanical and electrical products made up about 60 percent of China’s exports, with high-tech items such as electric vehicles, industrial robots and integrated circuits seeing strong growth.
Despite rising global uncertainties and a sluggish global recovery, China remains a magnet for foreign investment. Over 30,000 new foreign-invested enterprises were established in China during the first half of the year, up 11.7 percent year-on-year. The composition of foreign investment is also shifting toward high-tech industries, with significant increases in sectors such as e-commerce services, pharmaceutical manufacturing, aerospace and medical equipment.
China is not to blame for America’s trade imbalance, and targeting China will not solve its deeper economic problems. Many of the goods China exports to the United States use parts imported from other countries, and a large share comes from American companies operating in China. These are counted as Chinese exports but benefit U.S. firms.
In fact, American multinational companies have seen strong growth from their overseas operations, often earning more abroad than at home. Yet traditional trade statistics miss this, overstating the U.S. trade deficit and hiding who really gains from globalization — mostly the wealthy, not ordinary Americans.
It is ironic that U.S. officials accuse others of economic imbalance while ignoring deep structural imbalances at home — ones that pose risks not only to the American public, but to the global economy as well.
One key imbalance lies in the country’s “high consumption, low savings” economic model. Personal savings rates have been declining for decades, with recent figures showing dismal performance amid rising living costs and mounting household debt. On the public side, federal savings have deteriorated sharply as budget deficits balloon. The United States posted a 1.8 trillion U.S.-dollar deficit in fiscal 2024, followed by a 1.3- trillion-dollar shortfall in the first half of fiscal 2025, both near-historic highs outside the pandemic years.
Another long-standing issue is America’s debt-fueled growth model. The U.S. government began its borrowing spree in the 1980s, and in 1985, it shifted from a net creditor to a net debtor. National debt has soared from 3.2 trillion dollars in 1990 to nearly 37 trillion dollars today. Interest payments on that debt now exceed annual defense spending.
Perhaps most telling is the financialization of the American economy. Since the 1970s, the United States has steadily deindustrialized, moving away from manufacturing and trade toward finance. Loosely regulated financial markets have led to the overexpansion of virtual capital, while the real economy, especially manufacturing, has become increasingly hollowed out. These trends have deepened trade imbalances and made the U.S. economy more fragile.
The notion that China’s economy is “unbalanced” is not grounded in facts. It is a political narrative, crafted to justify pressure on China. Again and again, these claims have failed the test of reality. History will show that slandering others cannot halt China’s economic progress — and wordplay cannot obscure the truth forever.
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