China Trade Surplus Tops $1 Trillion for Second Consecutive Year

China’s trade surplus exceeded $1 trillion for the second consecutive year, according to official data released Tuesday. Customs agency figures show exports surged 35.2% in October compared to the same period last year. Imports also climbed, rising 41.6% year-on-year.

The cumulative surplus for the period between January and October reached $1.04 trillion. This places the country on a trajectory to surpass last year’s record of $1.2 trillion. Despite the annual total growing, the monthly surplus narrowed to $105.3 billion in October, down from $133.5 billion in September as import activity picked up.

Economists attribute the export growth to high-tech goods, particularly semiconductors and automobiles. Dave Chia, an economist at Moody’s Analytics, stated that he expects Chinese exports to remain strong for the remainder of the year, driven by the electronics and auto sectors. However, he noted that trade curbs by the European Union pose a risk alongside heightened U.S. trade barriers.

Alicia García-Herrero, chief economist for Asia Pacific at Natixis, described the current situation as unsustainable. She pointed to overcapacity in various industries, excess domestic savings, and weakened domestic demand as factors forcing China to ship goods abroad. She observed that some nations are moving to protect their own industrial bases in response.

On the production floor, manufacturers report intense pressure. Cinders Zhou, who sells eyewear for a manufacturer in Linhai city in Zhejiang province, said competition has become ferocious as China’s economy slows. Zhou, whose company sells frames and lenses domestically and abroad, noted that product homogenization has forced companies to compete primarily on price.

Trade is expected to be a central topic during planned meetings between U.S. President Donald Trump and Chinese leader Xi Jinping. These talks are scheduled for later this month on the sidelines of the Asia-Pacific Economic Cooperation leaders summit in Shenzhen. A two-month extension of a trade truce through January has provided temporary relief to exporters, though the duration of that pause remains uncertain.

Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, said U.S. and European policies have added significant difficulties for Chinese businesses attempting to expand. Strong exports have helped offset sluggish domestic demand in China, where the economy is forecast to meet the official target of 4.5% to 5% annual growth this year.