A report published by the Council on Foreign Relations (CFR) alleges that China has systematically understated its current account surplus through statistical adjustments, challenging the accuracy of data used by the International Monetary Fund and the OECD. The CFR contends that Beijing altered its balance-of-payments methodology in 2022, removing errors and omissions from the financial account while simultaneously reducing the reported goods surplus, and applied the changes retrospectively to 2021. As a result, a widely circulated chart showing Europe’s surplus exceeding China’s relative to GDP in 2024 is, according to the report, deceptive. Once Ireland’s profit-shifting distortions are excluded, China’s combined goods and services surplus is estimated to be roughly twice that of the euro area and has expanded sharply over the past five years.

Viewed from Beijing, the trade imbalance is not solely a Chinese phenomenon. Huang Yiping, dean of Peking University’s National School of Development and an adviser to the People’s Bank of China, argues that global imbalances have widened because other economies are struggling to adjust their economic structures. He points to China’s progress in reducing its surplus from nearly 10 per cent of GDP in 2007 to about 3.7 per cent in recent years, while acknowledging that domestic consumption remains below global averages. Chinese officials and state-linked commentary also maintain that the competitiveness of Chinese firms—built on efficiency and innovation—should not be penalised by new protectionist barriers, and that Beijing has fulfilled the market-opening commitments it made upon joining the WTO. In Dhaka, the asymmetry is stark: data presented by Bangladesh’s commerce minister to parliament this week show that the country’s bilateral trade deficit with China reached $17.86 billion in the 2024–25 fiscal year, the largest with any single partner, as imports of $18.56 billion dwarfed exports of just $694 million.

European strategic analysts frame China’s trade and industrial expansion as one component of a wider competition that extends into cultural and cognitive domains. Writing in the Italian publication Affari Italiani, they describe how China’s fashion sector has been transformed from a manufacturing base into a vehicle of strategic influence. Since its WTO accession in 2001, Chinese firms and state-backed institutions are said to have systematically studied Western luxury branding, marketing psychology, and intellectual property management, using subcontracting and original design manufacturer contracts to access technical specifications and positioning strategies. Investment in design academies and the creation of fashion weeks in Shanghai and Beijing are presented as deliberate steps to shift from ‘Made in China’ to ‘Designed in China’, shaping global aesthetic standards and consumer aspirations. These analysts argue that Western vulnerabilities—deindustrialisation, regulatory gaps in social commerce, and a fragmentation of identity among younger demographics—have accelerated the reorientation of cultural flows, allowing external aesthetic and behavioural models to be absorbed as spontaneous and depoliticised consumer choices.

The CFR report calls for international organisations to move beyond annual reported current account figures and adopt trailing four-quarter sums in their assessments of China’s external position, warning that the reported investment income deficit—which shows China losing $125 billion net on interest and dividends despite being the world’s second-largest external investor—is not credible. The findings are likely to intensify debates in Washington and European capitals over trade defence instruments and industrial policy, where tariffs and subsidies are already being deployed in response to perceived supply-chain vulnerabilities. Meanwhile, Bangladesh is pursuing free trade agreements and GSP Plus status with the EU, China, and India to mitigate the impact of its upcoming graduation from least-developed country status, and has recently secured duty-free access to China for 99 per cent of tariff lines. The IMF has not yet publicly responded to the CFR’s allegations, but the report’s recommendations place additional scrutiny on the Fund’s forthcoming economic surveillance reports.