China’s trade surplus surpasses US$1 trillion for a second straight year, as exports surge 35%

China’s trade surplus exceeded US$1 trillion for a second straight year, according to official data released on Tuesday, as pressure mounts for greater balance in trade with Beijing.

Exports in October surged 35.2 per cent from a year earlier, the customs agency said. Exports have grown rapidly this year, supported by high-tech goods like semiconductors and autos.

Imports rose 41.6 per cent year-on-year.

Between January and October, China logged a US$1.04-trillion trade surplus, even as the trade surplus narrowed last month to US$105.3 billion from US$133.5 billion in September as imports picked up pace.

That puts China on track for surpassing last year’s record US$1.2-trillion trade surplus in 2026.

“We expect Chinese exports to stay strong for the rest of this year, led by electronics and autos,” said Dave Chia, an economist at Moody’s Analytics.

China’s imports soared in October partly because of a recovery in shipments of crude oil from the Persian Gulf.

Overcapacity in many industries, excess domestic savings and weakened domestic demand are still leading China to ship its goods abroad as some countries move to protect their own industries, said Alicia García-Herrero, chief economist for Asia Pacific at French bank Natixis.

The situation is not sustainable, she said.

Businesses are feeling the pressure of ferocious competition as China’s economy has slowed, said Cinders Zhou, who sells eyewear for a manufacturer in Linhai city in eastern China’s Zhejiang province.

“It comes down to product quality, or rather the increasing lack of it across the industry, since there’s significant homogenisation,” said Zhou, whose company makes frames and lenses sold both in and outside China. “That has forced everyone to compete on price,” she said.

Trade curbs by the European Union (EU) pose an important risk at a time of heightened US trade barriers and tariffs, Chia said.

Still, the EU’s trade measures apply to only a small part of China’s exports, said Nguyen Hoang Nam with Capital Economics.

China has insisted it is not seeking to expand its surplus but wants more balanced global trade.

However, strong exports have helped offset sluggish domestic demand. The economy is forecast to meet Beijing’s official target of a 4.5 per cent to 5 per cent annual growth this year, slightly slower than last year’s 5 per cent expansion.

China’s exports to the US grew 32.9 per cent in October year-on-year, building on a low base after China-US trade was hit last year by Trump’s elevated tariffs. China’s exports to the EU in October rose 24.3 per cent year-on-year. They rose 17.2 per cent in January-October.

For the first 10 months, the trade surplus with the US was around US$266.5 billion, while for the EU, the 10-month difference was more than US$310 billion. In 2025, the EU recorded a roughly US$410-billion trade deficit with China, or more than US$1.1 billion each day.

Figures reported by China often differ from those reported by its trading partner.

Also in October, China’s semiconductor exports soared 137.1 per cent in terms of value from the year before. Exports of autos rose 37.6 per cent.

China’s exports could be vulnerable to setbacks for the artificial intelligence industry, a concern that deepened with the Democratic victories in the US mid-term elections, given the public backlash against expansion of data centres.

“If the AI boom slows or turns into a correction, lower chip and electronics prices and smaller shipping volumes would hit China’s exports hard,” Chia said.

Trade is likely to be among top issues on the agenda in planned meetings between US President Donald Trump and Chinese leader Xi Jinping next week on the sidelines of the Asia-Pacific Economic Cooperation leaders summit in China’s technology hub, Shenzhen.

A two-month extension of a trade truce until January has provided some relief to exporters, though it’s unclear how long that may last.

US and European trade policies have added “a lot of difficulties” for Chinese businesses to expand in the markets, said Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, an industry group.

AP