While Western officials still name China’s trade surplus as an area of concern, analysts said the 2026 surplus is on track to beat last year’s record
China’s exports continued to beat expectations in August, buoyed by strong demand for tech products and pre-Christmas orders that offset severe weather disruptions, though analysts warned the country’s widening trade imbalances remained a concern among Western policymakers.
The country’s exports rose by 25 per cent year on year to US$401.44 billion last month, according to Chinese customs data released on Tuesday. The reading was above a forecast of 21.93 per cent growth from economists polled by financial data provider Wind. That compared with 23.9 per cent growth in July.
China also saw imports grow by 28.2 per cent last month to US$282.36 billion, slightly above the Wind poll’s projections of 28.07 per cent growth.
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That brought China’s trade surplus to US$119.09 billion last month, up from US$112.5 billion in July. This marked the fourth consecutive month the surplus had stayed above US$100 billion.
China’s export sector has remained resilient this year, as the global artificial intelligence boom and energy security worries linked to regional conflicts – including the US-Israel war on Iran – have driven up shipments of goods as well as prices.
Exports have also benefited from seasonal pre-Christmas orders, though a series of typhoons last month caused widespread delays at Shanghai’s two major container ports.
Xing Zhaopeng, a senior China strategist at ANZ Research, said that demand related to AI offset the effects of adverse weather, with high-priced tech shipments boosting export figures, while tariff uncertainty continued to front-load US import demand.
However, looking ahead, Xing said he expected overall export growth to slow later in the year due to a higher base, noting exports may be close to their peak and fourth-quarter growth “may not be so strong”.
Lynn Song, chief economist for Greater China at ING, also noted that tech-related export categories outperformed in August. “The trade data came in broadly in line with expectations, and illustrates that external demand remains strong.”
He added he expected China’s balance of trade to keep growing, with another record trade surplus likely by the end of this year. The cumulative surplus had already reached US$805.51 billion in the first eight months of 2026, up about 3 per cent from the same period last year, customs data showed.
That figure, which hit a record US$1.2 trillion last year, has drawn intensified scrutiny from the West and prompted trade restrictions over Beijing’s industrial policy.
Speaking publicly after a meeting of Group of 20 finance ministers last week, US Treasury Secretary Scott Bessent called China’s current account surplus “unsustainable” and cited opposition from Beijing as the reason the group failed to issue a unanimous statement.
As China continues to rely on exports to support the economy, trade imbalance has become an area of discussion among policymakers, said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.
He added that while the recent appreciation of the Japanese yen and South Korean won had built up pressure on the yuan to appreciate, exchange rate adjustment would likely be modest this year, with limited impact on trade imbalances.
President Xi Jinping is scheduled to meet US President Donald Trump in Washington later this month, with trade, AI and the Iran war expected to be high on the agenda.
In August, China’s exports to the United States rose 34.4 per cent year on year, against a low base for the same period last year.
Exports to members of the Association of Southeast Asian Nations, China’s largest trading partner by bloc, rose by 30.21 per cent year on year, while shipments to members of the European Union increased by 6.61 per cent.
The world’s second-largest economy is taking steps to further boost trade with Southeast Asia. The 134km (83-mile) Pinglu Canal is set to open to navigation next week, linking south China’s Guangxi Zhuang autonomous region to Vietnam and other countries in the region via the Gulf of Tonkin, also known as the Beibu Gulf.
Meanwhile, the EU’s trade deficit with China has become a point of contention for Brussels. Amid marathon trade talks with their Chinese counterparts at the end of June, the bloc’s trade officials set a three-month deadline for the two sides to make “tangible progress” in disputes spanning several areas.
EU policymakers and business leaders have expressed fears that cheap Chinese imports – aided by hefty state subsidies – are helping to deindustrialise swathes of the continent’s manufacturing economy.
Separated by product category, the data showed tech-related exports continued to rise as automobile exports slowed.
Shipments of integrated circuits fell by 7.92 per cent year on year in volume terms last month but surged by 129.83 per cent in value – driven by higher prices amid a memory chip shortage fuelled by a global AI infrastructure buildout. The pace improved upon July’s 116.57 per cent growth, as well as June’s 121.9 per cent growth rate.
Outbound shipments of automatic data-processing equipment and related components also jumped last month, growing by 76.52 per cent year on year. Export growth for automobiles, however, was 43 per cent in value terms, down from the 60 per cent rate recorded in July.
China’s rare earth exports fell by 18.25 per cent year on year by volume, as Beijing continues to exert tight control over shipments of the minerals, which are essential to the production of a range of hi-tech products.
Meanwhile, imports came in a little softer than expected, Song said.
Both the import volume and value of automobiles dropped in August, falling by 50 and 32 per cent, respectively.
“China’s import profile is undergoing a clear structural shift in autos, where heavy domestic competition has also driven a sharp drop in demand for foreign imports,” Song said.
The country’s crude oil imports reached US$22.72 billion last month, down 8.85 per cent year on year in value terms, while shipments fell by 23.36 per cent.
Among emerging economies, China’s imports from Africa slowed to just 3.7 per cent year on year compared with a 25 per cent surge in July. Last week, Xi paid a state visit to Egypt, his first in 10 years, aimed at boosting economic and trade ties.
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This article originally appeared on the South China Morning Post (www.scmp.com), the leading news media reporting on China and Asia.
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