The world’s second-largest economy, in terms of GDP, has achieved a historic milestone by reporting an annual trade surplus worth a record $1.19 trillion for 2025, according to customs data released on Jan. 14, 2026. Remarkably, despite facing a year of concurrent waves of U.S. tariffs under the Trump administration, with U.S. duties on many goods remaining as high as 47.5%, China’s economy demonstrated a solid 20% year-over-year rise in its trade surplus. 

Chinese producers aggressively diversified their export markets last year, resulting in surging shipments to Southeast Asia, Africa, and Latin America, thereby effectively offsetting a significant decline in exports to the United States. 

Empirically, exports to regions beyond the United States saw significant increases, with the value of goods sent to Africa up 26.5%, the Association of Southeast Asian Nations up 14%, and the European Union up 9% (as cited in CNN Business). On the contrary, China’s exports to the country dropped 20% in 2025, as mentioned by a CNBC report, while its authorities struggled to boost imports amid weak domestic consumption. 

The resulting surplus, equivalent to the GDP of a major economy like Saudi Arabia, highlights China’s entrenched role in global supply chains and turns the spotlight onto Chinese exchange-traded funds (ETFs) as a strategic investment choice for investors seeking exposure to this powerful economic narrative.

Now, before suggesting a few Chinese ETFs for your portfolio, let us delve a bit deeper into what led to this trade surplus for China and whether it will sustain in the coming days. This would help you make a more informed decision.  

What Fueled China’s Trade Surplus?

China’s record trade surplus is no accident; it is the result of a calculated trade policy adopted by Chinese manufacturers in conjunction with supportive economic policies taken by the Chinese administration. 

Notably, the government subsidized high-tech sectors like electric vehicles (EVs), solar energy, and legacy semiconductors, which helped China build a cost advantage that makes its goods indispensable globally. On the other hand, Chinese industrials diversified away from the United States, rerouting shipments to export their products aggressively into markets hungry for cheaper goods. 

This pivot, combined with a competitive yuan and strong global demand for Chinese green technology and electronics, has enabled China not only to withstand protectionist pressures from America but also to dramatically expand its global trade footprint. 

Moreover, Beijing leaned heavily on its "Made in China 2025" and "15th Five-Year Plan" frameworks to upgrade its industrial system last year. This strategy also boosted its exports, particularly in high-tech sectors, which increased 13% year over year in 2025.

Will China Sustain Its Trade Surplus?

Looking ahead, steady exports of essential goods ranging from raw materials used in green energy to semiconductors can be expected to continue driving China’s trade surplus over the next few years. 

In the same line of thought, Goldman Sachs recently raised its GDP forecast for China to 4.8%, along with predicting the nation’s trade surplus to rise to 4.2% of GDP in 2026 from 3.6% in 2025. According to Research experts from Goldman Sachs, China will continue to show export resilience this year, backed by the rapid expansion of exports to emerging market economies, limited ability for other countries to impose significant trade barriers against China in the face of its dominance in critical minerals, and the higher growth potential for its high-tech exports.

The World Bank, in a recently released report, also raised its forecast for China’s growth in 2026 to 4.4%, higher than its June projection, anticipating further fiscal stimulus, continued resilience of exports, and improved investment sentiment. 

However, some analysts have expressed their concerns centering on the sustainability of China’s export-led model, given rising global protectionism and the unresolved domestic property crisis, which might weigh on consumer confidence and broader economic rebalancing.

ETFs to Watch

Considering the aforementioned discussion, China’s record trade surplus will likely continue in the near term, although there remains some concern about the nation’s deep internal imbalances. For investors, this scenario suggests that while growth opportunities persist, they come with elevated macro and geopolitical risks. 

Amid this background, a well-constructed ETF approach offers a prudent path to navigate this landscape. As a next step, investors may consider adding the following Chinese ETFs to their watchlists, enabling participation in the country’s evolving economic growth while offsetting idiosyncratic risk associated with holding a single company that could face a sudden downturn due to unforeseen regulatory actions by foreign authorities.

iShares MSCI China ETF (MCHI Quick QuoteMCHI - Free Report)

This fund, with net assets worth $8.16 billion, offers exposure to 560 large and mid-sized companies in China. Sector-wise, Consumer Discretionary (27.72%), Communication (22.77%) and Financials (17.33%) constitute the top three holdings in this fund. 

MCHI has surged 43.3% over the past year. The fund charges 59 basis points (bps) as fees. It traded at a volume of 2.55 million in the last trading session. 

Invesco China Technology ETF (CQQQ Quick QuoteCQQQ - Free Report)

This fund, with market value $3.1 billion, offers exposure to 158 Chinese technology companies. 

CQQQ has soared 51.9% over the past year. The fund charges 65 bps as fees. It traded at a volume of 2.74 million in the last trading session. 

VanEck ChiNext ETF (CNXT Quick QuoteCNXT - Free Report)

This fund, with net assets worth $55 million, offers exposure to the 100 largest and most liquid stocks listed and trading on the ChiNext Market of the Shenzhen Stock Exchange. Sector-wise, Information Technology (40.41%), Industrials (33.01%) and Healthcare (8.79%) constitute the top three holdings in this fund. 

CNXT has rallied 74.4% over the past year. The fund charges 65 bps as fees. It traded at a volume of 0.08 million in the last trading session. 

iShares MSCI China Multisector Tech ETF (TCHI Quick QuoteTCHI - Free Report)

This fund, with net assets worth $47.09 million, offers exposure to 167 large and mid-cap Chinese companies at the forefront of technological innovation. Sector-wise, Information Technology (44.47%), Communication (23%) and Consumer Discretionary (20.83%) constitute the top three holdings in this fund. 

TCHI has surged 44.5% over the past year. The fund charges 59 bps as fees. It traded at a volume of 0.04 million in the last trading session.