China’s Trade Surplus Tops $1 Trillion For Second Straight Year As Exports Jump 35.2% In October

China’s trade surplus has crossed $1 trillion for the second consecutive year, as exports surged 35.2 per cent in October, driven by strong overseas demand for semiconductors, electronics, electric vehicles (EVs) and other high-technology products. Rising demand for artificial intelligence (AI) infrastructure and energy purchases amid disruptions linked to the Iran war have also influenced the country's trade performance.

According to China's customs data, the cumulative trade surplus reached $1.04 trillion in the first 10 months of 2026, compared with $964.8 billion during the corresponding period last year. The latest figures put Beijing on course to surpass the record $1.2 trillion surplus recorded in 2025.

October's export growth was slightly lower than the 36.3 per cent expansion recorded in September. However, imports accelerated sharply, rising 41.6 per cent, indicating stronger demand for overseas goods, technology components and industrial inputs.

China's export growth has increasingly been supported by its expanding high-technology manufacturing sector. Semiconductors, electronics, EVs and advanced industrial products have emerged as major contributors, alongside overseas demand for electronic components, raw materials, rare earths and metals.

The global AI infrastructure boom has provided another boost, with Chinese manufacturers benefiting from international orders for technology-related products and components.

However, the export boom also highlights weaknesses in China's domestic economy. Weak household consumption, a prolonged property sector downturn and subdued domestic demand have made overseas markets increasingly important for absorbing the country's industrial output. Economists have also pointed to industrial overcapacity, excess domestic savings and intensifying competition as factors encouraging manufacturers to expand exports. The US-Israeli war with Iran has added another dimension to China's trade outlook by disrupting Middle Eastern crude oil supplies, increasing shipping risks and putting pressure on global energy markets.

As the world's largest crude oil importer, China faces challenges from disruptions to shipments passing through the strategically important Strait of Hormuz, a critical route for global energy supplies.

Despite the conflict, China's crude oil imports rebounded in October. The country imported 41.94 million tonnes, equivalent to around 9.88 million barrels per day. Daily imports rose 9.4 per cent from September, reaching their highest level since March.

The recovery came even as the conflict continued to affect Middle Eastern supplies. Higher energy prices and adjustments to procurement and supply chains have also increased pressure on China's import bill.

The impact extended to refined petroleum products. China's exports of oil products, including gasoline, diesel, jet fuel and fuel oil, fell to 5.18 million tonnes in October, down from 7.16 million tonnes in September.

Meanwhile, China's monthly trade surplus narrowed to $105.3 billion in October, compared with $133.53 billion in September. The decline was largely driven by imports growing faster than exports, with import growth of 41.6 per cent outpacing the 35.2 per cent increase in exports.

Another factor was the appreciation of the Chinese yuan, which reached a more than four-year high in October following a series of stronger midpoint fixings by the People's Bank of China. A stronger currency can make Chinese goods relatively more expensive for overseas buyers, potentially affecting exporters' competitiveness. However, its impact on the dollar value of trade also depends on pricing and currency conversion.