A record-setting surge in China’s exports dwarfed its imports in September, as the country’s vast manufacturing sector churned out cars, solar panels, electrical equipment and other goods for markets worldwide.
China’s General Administration of Customs said the country recorded a $133.5 billion trade surplus last month, the second-highest month ever. The latest figures put China on course to considerably exceed last year’s record $1.19 trillion trade surplus.
Another month of skyrocketing exports is expected to further stoke tensions with many trading partners, including in Europe, where anger over the flood of Chinese vehicles and other items is prompting some leaders to propose a so-called “kill switch” to shut out goods from China.
Economists disagree on how much of China’s enormous trade surplus is driven by stronger exports and how much stems from weaker imports. A weak currency has helped make Chinese goods more competitive overseas, while raising the cost of imported products at home.
The value of the renminbi, China’s currency, has fallen more than 14 percent in inflation-adjusted terms against a broad set of currencies since March 2022, according to the Bank of International Settlements, an institution owned by the world’s central banks, including China’s. March 2022 was when China began a two-month Covid-19 lockdown in Shanghai, which dealt a lasting blow to consumer confidence.
Broad tax breaks for exporters have also fueled the export boom. The incentives cost China’s finance ministry about $318 billion last year.
The customs agency said exports soared 36.3 percent in September from a year earlier. It was the largest year-on-year percentage gain in Chinese exports since July 2010, excluding months distorted by the timing of Lunar New Year.
Exports climbed to a record $447.2 billion. September’s trade surplus trailed only January 2025, when the timing of Lunar New Year prompted Chinese exporters to rush orders before the extended holiday.
Despite the export surge, Beijing has been reluctant to cut tax breaks for exporters or to allow the currency to appreciate sharply, fearing job losses in industries already squeezed by tariffs. In Guangzhou, a garment manufacturing hub, producers are struggling to compete with lower-wage countries.
On a recent afternoon, a factory making padded jackets was nearly deserted because it lacked orders. “If you’re producing for export, there are tariffs to deal with, and fabric and labor are expensive, so a lot of people don’t want to do exports anymore,” said the factory’s manager, who gave his family name, Ling.
At the same time, a prolonged housing market crash and rising unemployment have left many Chinese households reluctant to spend. Beijing has also poured government support into building domestic manufacturing industries, reducing the country’s reliance on imported goods.
Chinese companies are also pinched by rising raw material costs and weak consumer demand that leaves little room to raise prices. Factory-gate and mining prices rose 5 percent in September from a year earlier, the National Bureau of Statistics reported on Wednesday, while consumer prices increased just 0.9 percent.
Sluggish consumer demand and expanding domestic production have depressed imports of almost everything except raw materials such as oil and copper, much of which are used to manufacture further exports. Imports rose 31 percent in September from the same month a year earlier, partly because imported oil costs rose substantially.
China’s auto industry offers a particularly stark picture of the divide between weak domestic demand and booming exports. Retail car sales plunged 28 percent in September from a year earlier, according to the China Passenger Car Association, which works closely with the country’s car dealers
From the summer of 2024 through the end of 2025, China offered generous subsidies to encourage consumers to trade in older gas guzzlers for electric cars and plug-in, gasoline-electric hybrid cars. The program brought forward purchases that might otherwise have taken place this year, contributing to the current sales slump.
But the broader economic slowdown now appears to be taking a greater toll than the expiration of those incentives. The number of cars sold at dealerships in September was also down nearly 20 percent below the level in September 2023, before the trade-in program began.
While domestic sales have faltered, China’s car exports have soared, and are up 11-fold since 2020. The flood of Chinese-made vehicles into overseas markets has alarmed automakers elsewhere, particularly in Europe.
On Friday, the European Union and China said they had reached an “understanding” to limit China’s exports of plug-in hybrid cars to Europe. China’s trade surplus set another record with Europe last month.
China’s manufacturing exports have surged since it joined the World Trade Organization in 2001, when Beijing pledged to open financial services, including credit cards, to foreign competition. After 25 years of delays, during which China built its own electronic payments system, Beijing announced Tuesday that Visa could take a significant step toward establishing a bank card clearing business, though further approvals are needed.
After decades of American complaints about delays, the Visa decision, along with the compromise with Europe on plug-in hybrid cars, suggests Beijing may be taking small steps to address foreign concerns about its trade surplus.
Ruoxin Zhang contributed research.
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