China exports surge at start of 2026 as trade surplus widens sharply.

Summary:

• China’s exports surged 21.8% y/y in January–February, far exceeding expectations and accelerating sharply from December’s 6.6% growth.

• The country recorded a $213.6B trade surplus, well above forecasts and last year’s level.

• Imports also jumped 19.8% y/y, suggesting stronger trade flows despite weak domestic demand.

• China’s export strength continues despite renewed U.S. tariffs, with manufacturers shifting shipments toward emerging markets.

• Energy trade data showed crude imports up 15.8%, while refined product exports rose and natural gas imports edged lower.

• Large stockpiles and diversified supply chains may help China weather global energy disruptions tied to geopolitical tensions.

China’s export engine accelerated sharply at the start of 2026, underscoring the country’s continued reliance on overseas demand as a key driver of economic growth.

Customs data showed exports rose 21.8% year-on-year in U.S. dollar terms during January and February, a dramatic increase from 6.6% growth in December and far stronger than economists had expected. The figures highlight the resilience of China’s manufacturing sector despite rising geopolitical tensions and renewed trade barriers.

The strong export performance pushed China’s trade surplus to $213.6 billion, comfortably above forecasts and well higher than the surplus recorded during the same period last year. The surge keeps the world’s second-largest economy on track to potentially exceed last year’s record $1.2 trillion trade surplus.

Imports also grew strongly, rising 19.8% year-on-year during the period, indicating robust trade flows even as domestic demand remains uneven.

China’s export momentum has persisted despite renewed tariff pressure from the United States in 2025. Many manufacturers have mitigated the impact by redirecting shipments toward Southeast Asia, Africa and Latin America, helping sustain industrial production even as trade tensions with Washington remain unresolved.

At the same time, policymakers continue to lean on exports as a key pillar of economic growth. Premier Li Qiang recently set a 2026 GDP growth target of 4.5–5%, slightly below last year’s goal, which was achieved in large part thanks to a surge in the trade surplus.

Although authorities have pledged to strengthen domestic consumption in the next five-year plan, analysts remain sceptical that China will significantly reduce its dependence on exports in the near term.

Additional trade data highlighted shifts in energy flows. China’s crude oil imports climbed 15.8% year-on-year to 96.93 million metric tons during January–February, while natural gas imports slipped 1.1%. Exports of refined petroleum products rose 12.7%, reflecting continued strength in refining activity.

China’s long-standing strategy of building strategic energy reserves and diversifying suppliers beyond the Middle East may also help cushion the economy against disruptions in global energy markets.

Looking ahead, trade tensions remain a key variable. U.S. President Donald Trump is expected to visit Beijing later this month for talks with Chinese leaders, though expectations for a lasting trade truce remain limited.

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