China posts $1.04 trillion trade surplus as exports jump 35.2%

China's trade surplus surpassed $1 trillion for a second consecutive year in January through October, customs data showed Tuesday, as October exports rose 35.2% from a year earlier.

The General Administration of Customs recorded a $1.04 trillion surplus over those 10 months, the highest for that period, according to the Financial Times. China recorded a full-year high of $1.2 trillion in 2025, and The Independent reported that the latest figures put it on course to exceed that mark.

Demand for Chinese chips and artificial intelligence hardware accounts for much of the export growth. China produces much of the equipment used in AI data centers, though it does not make the most powerful semiconductors.

"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.

Chia also identified a risk. "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," he said.

Imports grow faster

The rise in October exports exceeded the 33.5% growth analysts had predicted in a Reuters poll, CNBC reported. Imports climbed more quickly, up 41.6% against the poll's forecast of 32%.

China's monthly surplus fell from $133.5 billion in September to $105.3 billion in October. It was the smallest since April, according to LSEG data cited by CNBC.

The Independent attributed the decline to faster import growth, while The New York Times pointed to persistently high oil prices.

Pressure from trading partners

China's trading partners have increased their calls for Beijing to strengthen domestic demand and bring greater balance to its economy. The record surplus could heighten tensions with partners including the European Union, the Financial Times reported.

Top Chinese officials say Beijing wants more balanced global trade rather than a larger surplus.

Alicia García-Herrero, chief economist for Asia Pacific at French bank Natixis, said overcapacity, excess domestic savings and weak domestic demand are forcing China to export goods while some countries protect their own industries. She said the situation is not sustainable.

Cinders Zhou, who sells eyewear for a manufacturer in Linhai in Zhejiang province, said businesses face intense competition as the economy slows and industry products become alike. "That has forced everyone to compete on price," Zhou said.

Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, said U.S. and European trade policies have created "a lot of difficulties" for Chinese businesses expanding in those markets.

The EU and Beijing agreed in October to limit Chinese hybrid vehicle imports over the next few years, with the restrictions taking effect Dec. 1. Chia said EU trade curbs present an important risk amid heightened U.S. tariffs and trade barriers.

Brad Setser, a senior fellow at the Council on Foreign Relations, said the EU's annual cap of 350,000 cars exceeds China's hybrid shipments to Europe in 2025 but is far below the 800,000-unit annualized rate recorded over the last three months. "Europe still is a long way from a coherent trade and industrial policy with respect to autos, let alone a coherent economic policy towards overall trade with China," Setser said.

Truce with Washington

Washington and Beijing agreed in September to extend a broader trade truce by two months to January. The Times reported that, a day before Tuesday's data release, the two sides took steps to ease tariffs and limit the use of export controls through Jan. 10, putting the agreement into effect.

Chinese President Xi Jinping and U.S. President Donald Trump are expected to meet for a third time this year at the Asia-Pacific Economic Cooperation leaders' summit in Shenzhen, China, with trade likely to be among the main issues.