HONG KONG — China's exports saw a significant surge of 36.3% in September from the previous year, according to figures released by its customs agency on Wednesday. This growth rate accelerated from the 25% increase recorded in August, exceeding economists' expectations and contributing to a substantial trade surplus.
Imports also climbed, rising 31% in September year-on-year, an acceleration from August's 28.2% increase. These figures resulted in a $133.5 billion trade surplus for China last month, widening from $119.1 billion in August.
For the first nine months of the year, China's trade surplus reached $938 billion. This trajectory suggests the country is on course to surpass last year's full-year record of $1.2 trillion, despite mounting pressure from international trading partners, particularly the European Union, to rebalance its trade.
Strong export performance has been a key driver of China's overall economic growth this year, offsetting sluggish domestic consumption and investment, which have been hampered by a prolonged downturn in the real estate sector.
However, the resilience of China's exports now faces increasing challenges, noted Ecaterina Bigos, a senior market strategist at BNP Paribas Asset Management. Bigos highlighted that while U.S.-China trade tensions have somewhat eased, the European Union's efforts to rebalance trade specifically target high-value exports. The U.S. has also initiated an ongoing probe this year into China's and other trading partners' excess industrial capacity, although Washington and Beijing recently agreed to extend their trade truce and reduce tariffs on $60 billion worth of goods.
Eswar Prasad, a professor of economics and trade policy at Cornell University, pointed out that many of China's trading partners are grappling with weak growth prospects and are concerned about their manufacturing industries being overwhelmed by Chinese exports. Policymakers have also suggested that a weakened yuan, China's currency, against the U.S. dollar and other currencies, contributes to Chinese exports being cheaper overseas, exacerbating trade imbalances. China, however, maintains it has “no need or intent” to gain competitive advantages through currency devaluation, asserting that its trade growth is driven by its industrial competitiveness in the global market.
Bigos further explained that China's trade surplus and its high-tech export model rely on open markets. While diversifying exports into new markets such as Southeast Asia and Latin America can offer some relief, it cannot fully compensate for Western demand. Moreover, the country's reliance on high-tech exports could face additional hurdles if calls for a global slowdown in artificial intelligence development, citing safety concerns from some U.S. technology industry leaders, gain traction.
Max Zenglein, Asia Pacific senior economist at The Conference Board, warned that “A slowdown in the global AI investment cycle could pose a greater threat to China’s export growth than trade restrictions imposed by other countries.”
Chinese leaders have set an annual economic expansion target of 4.5%-5% for 2026. The country is expected to release its July-September quarterly economic growth figures next week. This week, the International Monetary Fund lowered its forecast for China’s 2026 economic growth to 4.5%, a 0.1 percentage point reduction from its previous projection, cautioning that robust exports alone cannot fully offset domestic weaknesses. Despite Chinese officials emphasizing the need to bolster domestic demand, analysts believe this has yet to become a priority for the current year, even with recent government measures like subsidies for homebuyers’ mortgage interest payments.
