China's trade surplus threatens global economies in 2025

China is set to have a massive trade surplus in 2025, reaching nearly a trillion dollars. This positions China as the largest net exporter in the world. Nilesh Shah, the managing director of Kotak Mutual Fund in India, has issued a stark warning about the implications of this. He argues that China’s trade practices will lead to deflation and recession in many countries. As other nations face trade barriers from Donald Trump's tariffs, they must rethink their economic strategies to compete with China. Shah believes that countries will need to adopt strategies similar to those used by China, which he describes with the ancient Indian terms for persuasion, incentives, punishment, and deception—collectively known as "sam, dam, dand, bhed." The influx of inexpensive Chinese goods into emerging markets is causing job losses and harming local industries. This situation is particularly acute in regions like Southeast Asia and Latin America. Shah warns that the economic fallout from China's export policies is not only serious but poses a global threat.