China's trade surplus hits $1.04 trillion in 10 months as exports surge but domestic demand stays weak

China recorded a trade surplus of $1.04 trillion in the first ten months of 2026. The figure covers January to October 2026. It is the second year in a row that China has crossed the one-trillion-dollar mark, once again showing its strength in the world economy.

In October, China's exports rose 35.2 per cent from a year earlier. Goods linked to artificial intelligence (AI), semiconductors, electronics and high technology are in strong demand in world markets, and this supported exports. Imports also rose 41.6 per cent in the same month.

The rise in exports is driven by growing demand for technology across the world. Demand for AI data centres, chips, networking equipment and industrial goods in particular is giving Chinese companies big opportunities. The success shows China's production capacity and its strong position in the world market.

But behind this success lie some serious questions about the domestic economy. Consumer spending within the country has not grown as much as expected compared with exports. China's economy therefore appears to be depending more on demand from foreign markets. This is likely to increase competition and trade tensions with trading partners in the United States and Europe.

The biggest challenge before China's economy is weak domestic demand. People are not spending on goods and services as expected, so transactions in the market remain limited. Because of the slowdown in the property sector, uncertainty over house prices and worry about future financial security, families are putting savings ahead of spending.

As a result, even with strong production capacity, the domestic market is not getting the momentum that was expected. Relying only on foreign demand could be risky in the long run. Raising people's spending and boosting the domestic market are therefore major challenges for China.