China's trade surplus crosses $1 trillion in 10 months, Europe worried
Riding the global wave of artificial intelligence (AI) infrastructure building and demand for high-technology products, China has further strengthened its position in international markets. In the first 10 months of this year, the country's total trade surplus crossed 1 trillion US dollars.
The picture emerged from Chinese customs data published on Tuesday. With the housing sector in prolonged recession in the domestic market and people reluctant to spend, Beijing is now relying entirely on foreign trade to make up for the shortfall in the economy.
International economists, however, say China's excessive dependence on exports could renew trade conflict and tension with one of its main international trading partners — especially the European Union (EU).
According to customs data calculated in US dollars, China's exports grew 35.2 percent in October compared with October last year. Growth was 36.3 percent in September, while economists had forecast it would be 33.5 percent in October. The growth achieved exceeded that forecast.
This remarkable export push took China's total trade surplus in the first 10 months of the year to 1.04 trillion dollars. China has thus touched the historic 1 trillion dollar trade surplus milestone for the second year in a row — this time a full month earlier than in 2025.
Imports also rose sharply in October, up 41.6 percent — far above the 32 percent mentioned in Reuters' forecast.
China's record trade surplus could further complicate its relationship with the European Union. European leaders have already planned new tariffs and restrictions on hybrid cars imported from China. Chinese automakers are rushing to secure exports to the European market before those new restrictions take effect.
Amid this export surge, efforts are under way to temporarily ease the trade dispute with Washington. Beijing announced formally on Monday that the 'trade truce' with the United States, whose term was due to end on 10 November, has been extended for two more months. But China will decide on imports of farm products from America based on how far Washington honours the agreement to cut reciprocal tariffs.
Joe Peissel, chief economist at Trivium China, an international research organisation focused on China, said, 'The risk of additional tariffs and new trade restrictions on China will remain high through 2027, because Chinese manufacturers are aggressively capturing international markets.'
Analysts say the main driver of China's export trade this year was the global race to build AI infrastructure. By making and supplying high-technology AI processors and related equipment, China is earning huge amounts of foreign currency.
In contrast to this remarkable export success, the picture inside the country is quite different. The long-term slump in the housing sector has badly hit people's savings and confidence, and spending and consumption in China's domestic market have fallen as a result.
With less spending in the domestic market, Chinese carmakers have turned fully towards foreign markets. According to industry association data, car exports from China grew at a record pace in October, while car sales in the domestic market have fallen for about 12 months in a row.
Next week, the Asia-Pacific Economic Cooperation (APEC) summit begins in Shenzhen, the technology city in south-eastern China. On the sidelines of the summit, a high-profile bilateral meeting is scheduled between Chinese President Xi Jinping and US President Donald Trump. It will be the third meeting between the two leaders in 2026.
According to analysts at Macquarie Group, how China's export trade performs next depends largely on how long this global AI wave lasts. Export growth is expected to continue in the last quarter of 2026, but it may slow somewhat from the first quarter of 2027, they believe.
