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When China becomes a domestic consumption economy, which necessarily involves raising the household income, and thereby the purchasing power of the people, it will also entail losing the net exporter status because China’s export goods will no longer remain competitive, at least for the low-intermediate value added industries.

So, the reduction in trade surplus and a shift towards balanced trade and even running a deficit is simply a natural consequence of such economic policy. It is a policy choice. It means people working less hours, have more time to enjoy leisure, as there is no longer a need to accumulate massive amount foreign assets through exports.

Note that China running a $1 trillion trade surplus every year means - on a very simplistic sense - that Chinese labor has created $1 trillion of value added goods while receiving nothing of substance in return (other than a number in the accounts in Chinese banks). In other words, it is practically a gift of real goods and services to the rest of the world, especially for the wealthy Western economies that leverage their high currency exchange rate to extract surplus values from the developing world.

All of that shipment could sink while en route to their export destinations for all we care and it does nothing to improve the lives of the Chinese people, except that the government has followed the IMF policy that advocates countries accumulate foreign assets such that domestic spending can occur without running into deficit.

Im asking because isnt US trade deficit only possible because of it's imperialistic nature? And if China were to run a trade deficit wouldnt it necessitate China becoming imperialist?

Only if by choice. The problem with most Global South exporter countries is that they have invested billions and billions over the past 30-40 years into export-oriented industries, having listening to the IMF. This made any decision to transition away from export economy very difficult and costly, and since there is no guarantee for a payoff (what happens when the US sanctions your economy because your economic model isn’t aligned with the US interests? is “good guy” China going to come and save your economy?), most countries would not and could not afford to do that. Especially so if your country depends on importing essential goods from other countries. Most importantly, BRICS has failed to present itself as an alternative bloc where countries can depend on to shift their economy towards.

China is very different though, for that it already commands 31% of the global manufacturing capacity. There is no clear obstacles for China to import from other countries, except for certain high tech stuff that some countries want to protect. But for the most part, whether it is food or energy, China will not have any trouble getting them.

The ideal scenario is that China imports from the other developing countries (running a trade deficit) such that those countries would not have to rely on selling to the US. This will be crucial for de-dollarization. Furthermore, China can use its vast foreign reserves to pay off the foreign currency-denominated debt of many Global South countries, which will also be critical for reducing the reliance of those countries on the US.

By reducing the reliance of developing countries on exporting to the US and other advanced Western economies, it will provide them with more freedom to pursue economy policies that benefit their own people, rather than to supply cheap goods to serve the West (and in doing so, suppressing the purchasing power and consumption demand of their own people). This will be a good start no matter how you look at it.