China’s trade surplus breaks $1 trillion as October exports jump 35%
Customs data shows imports also rising, but the gap between goods sold abroad and goods bought remains at a record high.
By Robert Ward ·
China recorded a trade surplus exceeding $1 trillion for the second consecutive year, according to customs data released Tuesday. The nation’s exports surged 35.2% in October compared to the same period last year, driven largely by high-tech products such as semiconductors and automobiles. This growth places the country on a path to surpass the previous record of $1.2 trillion set in 2025.
The surge in exports was matched by a sharp increase in imports, which rose 41.6% year-on-year. This rise in imported goods was partly due to a recovery in crude oil shipments from the Persian Gulf. Despite the increase in imports, the trade gap narrowed in October to $105.3 billion, down from $133.5 billion in September. From January through October, the cumulative surplus reached $1.04 trillion.
Economists attribute the continued export strength to overcapacity in various industries and weak domestic demand. Alicia García-Herrero, chief economist for Asia Pacific at Natixis, described the situation as unsustainable. She noted that excess domestic savings and a lack of internal consumption push Chinese manufacturers to ship goods abroad while other nations protect their own industries.
Business owners on the ground report intense pressure to maintain competitiveness. Cinders Zhou, who sells eyewear for a manufacturer in Linhai, Zhejiang province, said the industry faces significant homogenization. She explained that this lack of distinct product quality has forced competitors to lower prices. "That has forced everyone to compete on price," Zhou said.
Trade relations with the United States and Europe remain complex. Exports to the U.S. grew 32.9% in October, a rebound from a low base following last year’s tariffs. Exports to the EU rose 24.3% in the same month. For the first ten months of the year, the trade deficit with the EU exceeded $310 billion, while the deficit with the U.S. was approximately $266.5 billion.
Specific sectors showed dramatic growth. Semiconductor exports jumped 137.1% in value, and auto exports increased by 37.6%. Dave Chia of Moody’s Analytics expects electronics and autos to lead export growth for the remainder of the year. However, he warned that a slowdown in the artificial intelligence industry could hurt chip and electronics prices.
Trade policy discussions are expected to dominate upcoming meetings between U.S. President Donald Trump and Chinese leader Xi Jinping in Shenzhen. A two-month extension of a trade truce until January has provided temporary relief to exporters. Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, said U.S. and European policies have created many difficulties for Chinese businesses trying to expand in global markets.
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