China's Exports Surge 22% in Early 2026, Hitting Record Trade Surplus

Shipments in January and February sharply beat forecasts, pushing the trade surplus to its highest level on record.

Briefing

China's exports rose 21.8% in the first two months of 2026, well ahead of analyst expectations according to official data released on March 10, driving the trade surplus to its highest level on record and underlining the continued strength of Chinese manufacturing competitiveness. The strong performance came despite headwinds from US tariffs imposed under President Trump, with trade with the United States showing signs of waning even as overall export volumes climbed, following a record-breaking year for Chinese exports in 2025. The figures were reported before a wider Middle East conflict broke out, raising questions about whether geopolitical disruption could weigh on future trade flows.

China's Exports Surge 22% in Early 2026, Hitting Record Trade Surplus

China's exports powered into 2026 at a remarkable pace, rising 21.8% in the combined January-February period and pushing the country's trade surplus to its highest level on record, official customs data showed on Monday.

The figures, released on March 10, sharply beat market expectations and follow what Reuters described as a record-breaking year for Chinese exports in 2025. Analysts polled ahead of the release had anticipated a solid but more moderate acceleration; the actual outcome surpassed those forecasts by a wide margin, according to CNBC.

The strength of the data underscores the durability of China's export machine even in a challenging global trade environment. The gains came despite tariffs imposed by the administration of President Donald Trump, which have weighed on direct trade flows between China and the United States. The Associated Press reported that trade with the US specifically showed signs of waning during the period, suggesting Chinese exporters have continued to redirect shipments toward other markets.

Bloomberg noted that the data preceded the outbreak of conflict in the Middle East, adding a layer of uncertainty to the near-term outlook. Any sustained disruption to shipping routes or broader risk appetite could complicate an otherwise robust picture for Chinese trade in the months ahead.

The January-February window is typically reported as a combined figure by Chinese authorities to smooth out distortions caused by the Lunar New Year holiday, which can shift significantly between calendar years and affect factory output and shipping schedules.

Reuters had earlier cited a poll of economists suggesting that exports were likely to have opened the new year at an even faster pace following the record set in 2025, and Monday's data confirmed that view. The scale of the surplus, described by CNBC as surging to its highest on record, will likely intensify scrutiny from trading partners already concerned about the volume of Chinese goods entering global markets.

The figures arrive at a delicate moment for global trade policy. With Washington maintaining an aggressive tariff posture toward Beijing and Brussels examining its own suite of trade defence measures, China's ability to sustain export growth at this pace will be closely watched by policymakers and investors alike.

Analysis

A record Chinese trade surplus will sharpen political pressure on Beijing from both Washington and Brussels, raising the probability of additional tariff escalation or anti-dumping actions in 2026. Companies with significant China-dependent supply chains, including European industrial names and US consumer goods importers such as Nike and Hasbro, face heightened policy risk on their sourcing costs and market access.
The sustained redirection of Chinese exports away from the US toward Southeast Asia, Latin America, and Europe is compressing margins for domestic manufacturers in those regions who now compete with cheaper Chinese goods. Steel, solar, and electric vehicle sectors in Europe are most exposed, making names like ArcelorMittal and Stellantis vulnerable to further pricing pressure and potential earnings downgrades.
The record surplus will likely keep the yuan under appreciation pressure from trading partners even as the PBOC manages the exchange rate carefully. Commodity-linked currencies such as the Australian dollar and Brazilian real could face indirect headwinds if China's export dominance signals weaker domestic consumption, tempering expectations for raw material import demand.

Connected Events

The Iran war driving oil to $120 per barrel, as covered in multiple platform stories, adds a direct cost headwind to Chinese export competitiveness through higher shipping fuel costs and freight insurance premiums, potentially moderating the pace of the surplus in subsequent months even before any new tariff measures take effect.

The IEA's proposed record oil reserve release in response to the Iran conflict could temporarily ease freight cost pressures, but sustained Middle East disruption to shipping lanes through the Strait of Hormuz would disproportionately affect China's import bill for energy, creating a squeeze between strong export revenues and rising input costs.

China's Exports Surge 22% in Early 2026, Hitting Record Trade Surplus

China's Exports Surge 22% in Early 2026, Hitting Record Trade Surplus

Analysis

Connected Events

Further reading

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