$355 billion in excess low-skill value-added exports in 2022 left poorer countries with less room to build factories, jobs and export capacity, according to the report’s estimate of the “China squeeze.”
China’s manufacturing surplus totals about $2.2 trillion, with roughly $700 billion to $1.4 trillion concentrated in labor-intensive sectors such as apparel, footwear, toys, furniture and electronics assembly.
China’s value-added export share in low-skill goods held near 64% from 2013 to 2023 even as its share of the low-skilled labor force fell, suggesting dominance that standard trade theory would not predict.
The report says that persistence cannot be explained by wages alone: Chinese apparel wages average about $10,000 a year, around five times Bangladesh’s and four times India’s, raising questions about productivity, subsidies and a renminbi undervalued by 15% to 25%.
Sub-Saharan Africa, where low-skill exports are only about $12 billion, could gain the most from any easing of the squeeze, while the broader argument is that China’s bid for global leadership will be judged by whether it opens development space for poorer economies.
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China’s $1 Trillion Trade Surplus: The New Export Shock and Its Global Economic Fallout
Overview
The report highlights the "New China Shock," where China's export power has surged dramatically, with monthly trade surpluses surpassing $100 billion multiple times in 2025 and the annual surplus exceeding $1 trillion. Despite efforts by countries like the United States to limit Chinese exports through tariffs, China quickly redirected its goods to other markets, especially Europe and Asian nations. This rapid shift has left these regions feeling overwhelmed by the influx of Chinese products, with ASEAN countries seeing the largest increases. The scale and speed of China's export growth underline the urgent global challenge posed by its dominance in low-skill manufacturing.