China is facing a repeat of the tensions and uncertainty from the first presidency of Donald Trump, only with a weaker economy that’s even more reliant on exports than it was during the first trade war with the U.S.China’s record trade surplus of nearly $1 trillion last year was equivalent to more than 5% of its gross domestic product, the highest level since 2015. The surplus drove almost a third of the expansion last year, the most since 1997, according to data released last week.That dependency on overseas markets adds to a multitude of challenges facing President Xi Jinping: persistent deflation, lackluster consumer demand, an extended property slump and a currency under pressure. Bond yields are showing that markets expect the world’s No. 2 economy to weaken further.
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