China presents a trade surplus of more than a trillion dollars

Beijing is proud to announce that China's exports increased by 35.2 percent in October compared to the previous year. This year they have grown rapidly thanks to high-tech goods such as semiconductors and cars. However, imports also increased year-on-year by 41.6 percent.

Between January and October, China recorded a trade surplus of $1.04 trillion, although last month's trade surplus narrowed to $105.3 billion from $133.5 billion in September due to rising imports. This puts China on track to surpass last year's record trade surplus of $1.2 trillion.

Overcapacity in many industries, excessive domestic savings and weakened domestic demand continue to force China to export its goods abroad. Some countries are already taking measures to protect their own industries, said Alicia García-Herrero, chief Asia-Pacific economist at French bank Natixis. The situation is not sustainable, she said.

Companies are feeling the pressure of fierce competition as China's economy has slowed, said Cinders Zhou, who sells eyeglasses for a manufacturer in the city of Linhai in east China's Zhejiang province.

“It forced everyone to compete on price.”

“It comes down to product quality – or rather, the increasing lack thereof across the industry as significant homogenization takes place,” Zhou said. Its companies produce eyeglass frames and lenses that are sold both in China and abroad. “It forced everyone to compete on price,” he said.

Trade restrictions by the European Union pose a significant risk at a time of tightened U.S. trade barriers and tariffs, Chia said. Senior Chinese government officials emphasize that Beijing is not looking to expand its trade surplus, but is seeking a more balanced global trade.

China's exports could be at risk from setbacks in the AI ​​industry, a concern that has been heightened amid public backlash against data center expansion following Democratic victories in the U.S. midterm elections.

A two-month extension of the trade truce until January has given exporters some breathing room, although it is unclear how long that will last. The trade policies of the US and Europe, on the other hand, have caused “significant difficulties” for Chinese companies to expand in these markets, said Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association.

Strong exports helped offset weak domestic demand in China. Chinese experts are optimistic that the country's economy is expected to meet Beijing's official target of 4.5 to 5 percent annual growth this year. Last year it was exactly five percent.