China has started the year with a powerful trade performance. Exports surged 21.8% year-on-year in January–February 2026, far exceeding analysts’ expectations of 7.1% growth. Imports also rose sharply, climbing 19.8%, compared with forecasts of just 6.3%.
The result is a record trade surplus of $213.6 billion for the first two months of the year. That represents a 25.3% increase compared with the same period in 2025. These figures suggest that China is on track for another year of strong export dominance.
At the same time, global trade tensions are intensifying. The new data arrives just weeks before a highly anticipated meeting between US President Donald Trump and Chinese President Xi Jinping in Beijing.
Exports Driven by Regional Demand
The strongest export growth came from shipments to South-East Asia, which increased 29.4% year-on-year. Exports to the European Union rose 27.8%, reflecting resilient demand for Chinese industrial and consumer goods.
However, trade with the United States moved in the opposite direction.
Exports to the US declined by 11%, while imports from the US fell 26.7%. This divergence highlights the ongoing restructuring of global supply chains as companies adapt to tariffs and geopolitical uncertainty.
Many Chinese goods shipped to South-East Asia are later re-exported to the US after further processing. This strategy helps exporters reduce direct exposure to American tariffs.
Technology and Energy Fuel Trade Growth
The global artificial intelligence boom is also reshaping trade flows. Prices for semiconductors and integrated circuits have surged as demand for advanced computing infrastructure rises.
China’s trade data reflects this shift. Both imports and exports of integrated circuits increased sharply during the period, mirroring trends seen in Taiwan and South Korea, two of the world’s largest semiconductor hubs.
Energy imports have also played a role.
China, the world’s largest oil importer, increased crude shipments partly in response to geopolitical tensions in the Middle East. The US-Israel conflict involving Iran has disrupted key energy routes through the Gulf, prompting precautionary stockpiling.
Policy Changes Accelerate Shipments
Several short-term factors also boosted export volumes.
Chinese exporters accelerated shipments ahead of policy changes scheduled for April 1, including the end of export tax rebates for solar panels and reduced tax incentives for battery products. This created a surge of pre-deadline orders.
Seasonal factors also mattered. The Lunar New Year holiday last year created a low comparison base, amplifying the year-on-year growth rate.
Domestic Weakness Behind the Trade Surplus
Despite the strong export performance, economists warn that the underlying driver of China’s trade imbalance remains weak domestic demand.
The country is still dealing with the consequences of a prolonged property market slowdown. Falling real estate investment has reduced household confidence and spending. At the same time, deflationary pressures continue to weigh on prices.
As a result, manufacturers are increasingly dependent on overseas markets to absorb excess production capacity.