China’s trade surplus surpassed $1 trillion for the second consecutive year, reaching $1.04 trillion between January and October 2026 as global demand for artificial intelligence infrastructure and advanced electronics powered an export surge.
Official data released by China’s General Administration of Customs showed that exports in October climbed 35.2% from a year earlier in US dollar terms. While that pace slowed slightly from September’s 36.3% increase, it comfortably beat the 33.5% growth forecast by economists in a Reuters poll.
“China’s trade surplus surpassed $1tn in the first 10 months of this year, setting a new record and threatening to increase tensions with partners such as the EU over their fears that low-cost imports are undermining their own industries.” https://t.co/hMgveYCdrt
Imports grew even faster, rising 41.6% year-on-year in October and accelerating from September’s 31% gain, which also beat the median forecast of 32%. In Chinese Yuan terms, October’s trade surplus came in at CNY712.78 billion, a decline from the prior CNY905.97 billion and below the projection of CNY859 billion. This surge in purchases from abroad narrowed China’s monthly trade surplus to $105.3 billion, down from $133.5 billion the previous month.
Strong global appetite for high-tech goods, particularly semiconductors and automotive products, drove the expansion. Semiconductors and computer parts accounted for 40% of the increase in China’s exports this year according to Bloomberg’s tally. China's exports of semiconductors surged 111.1 per cent year-on-year in the first 10 months in US dollar value terms, while overall shipments of high-tech products jumped 47.9 per cent.
A couple of words on China's October trade data — One of the quirks of the Chinese data is the October is a month of relative weakness compared to September and October, so it isn't a surprise that October exports were down v September (and the surplus was down m/m) 1/ pic.twitter.com/KK4brhXyBy
The widening imbalance continues to draw scrutiny from trading partners. Joe Peisel, chief macroeconomist at Trivium China, warned about the trajectory of overseas expansion:
The risk of additional tariffs and a series of trade barriers will persist into 2027,
Joe Peisel, chief macroeconomist at Trivium China
Peisel added that Chinese manufacturers are continuing to expand their push into overseas markets, which is increasing the risk.
In Europe, leaders sought further trade restrictions after reaching an agreement with Beijing to limit Chinese hybrid vehicle exports over the next few years. With Europe, China booked a $33.4 billion surplus in October alone and $320.8 billion over the 10 months this year. Meanwhile, the Peterson Institute for International Economics reported that China’s real effective exchange rate is undervalued by about 20 percent.
Despite strong overseas sales, domestic consumption within China remains soft. Alicia García-Herrero, chief economist for Asia Pacific at Natixis, noted that businesses face intense competition at home, stating that it has forced everyone to compete on price.
China's currency is undervalued by around 20%, @GagnonMacro & Nishtha Agrawal write. Relative to the size of the world economy, China's trade surplus already exceeds the value reached during the "China Shock" of the 2000s, & it continues to rise.https://t.co/l42omtC2b2
Nevertheless, the export strength has given policymakers room to rely on moderate policy support.
Earlier coverage: China Producer Inflation Hits Fastest Pace in Over Four Years on Energy Costs
