China's trade surplus crosses $1 trillion for second year, AI exports drive boom

China's trade surplus passed $1 trillion for the second consecutive year, customs data showed Tuesday, reaching that level a month earlier than in 2025, driven by booming global demand for AI hardware. Chinese shipments to the United States rose 32.9% in October, as relations between Washington and Beijing improved after two summits between the two presidents.

The General Administration of Customs said exports rose 35.2% in October from a year earlier, to $412.3 billion. That was just under September's 36.3% growth but ahead of economists' forecasts. Imports grew faster still, up 41.6% to $307.1 billion. The January-to-October surplus reached $1.04 trillion, more than 8% above the same period last year.

October's monthly surplus was $105.3 billion, down from $133.5 billion in September and short of the roughly $125.8 billion analysts had expected. It was the smallest monthly gap since April. Chips led the surge. Integrated circuit exports jumped 137.1% to $39.6 billion, as demand grew for computer chips, data centre servers and networking equipment. Car exports rose 37.6% to $19.7 billion, and mobile phone shipments climbed 13.2%.

“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.

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The surplus is on course to beat last year's record of about $1.2 trillion. India's trade deficit with China has reached record levels. Between January and September 2026 alone, the trade deficit already crossed the $105.93 billion mark. Unlike Western European nations, India doesn't import finished Chinese consumer goods; India's reliance is industrial. It imports mostly intermediate and capital goods, an immediate disengagement of which will halt assembly lines.

The data came ahead of an expected meeting between President Xi Jinping and President Donald Trump at the APEC summit. A trade truce between the two countries has been extended to January, though analysts doubt how durable it is.

China's surplus with the European Union reached $310.7 billion for the first 10 months, up from $241.6 billion a year earlier. Last month, EU trade chief Maros Sefcovic and Chinese Commerce Minister Wang Wentao agreed in Beijing to limit hybrid vehicle exports to Europe.

The trade boom is helping Beijing offset weak domestic demand, with the property sector still a drag and inflation well below the official target of around 2%. Western governments are pressing China harder to rebalance its trade.