China's trade surplus has exceeded $1 trillion for the second consecutive year, with exports recording strong growth in October amid mounting international pressure on Beijing to address global trade imbalances, according to official data released Tuesday.
Exports surged 35.2 percent year-on-year in October, while imports increased 41.6 percent, the country's customs agency reported.
From January to October, China recorded a trade surplus of $1.04 trillion, although the surplus narrowed to $105.3 billion last month from $133.5 billion in September as imports grew faster.
The figures put China on course to surpass last year's record trade surplus of $1.2 trillion.
“We expect Chinese exports to stay strong for the rest of this year, led by electronics and autos,” said Dave Chia, an economist at Moody's Analytics.
However, China's industrial overcapacity, high domestic savings and weakening domestic demand are pushing manufacturers to send more goods overseas, even as several countries introduce measures to protect their domestic industries, said Alicia García-Herrero, chief economist for Asia Pacific at French bank Natixis.
She described the situation as unsustainable.
Businesses are also facing mounting pressure from intense competition as China's economy slows, said Cinders Zhou, who sells eyewear for a manufacturer in Linhai city in eastern Zhejiang province.
Zhou said increasing similarities among products and declining quality across the industry had forced businesses to compete mainly on prices. His company manufactures frames and lenses for both domestic and international markets.
Chia said trade restrictions imposed by the European Union posed a significant risk to Chinese exporters amid growing US trade barriers and tariffs.
Chinese officials have maintained that Beijing is not seeking to increase its trade surplus but instead wants more balanced global trade.
China's export sector could also face risks if the artificial intelligence industry loses momentum. Concerns have grown following Democratic victories in the US midterm elections, amid public opposition to the expansion of data centres.
“If the AI boom slows or turns into a correction, lower chip and electronics prices and smaller shipping volumes would hit China's exports hard,” Chia said.
Trade is expected to be among the major issues discussed during planned meetings between US President Donald Trump and Chinese President Xi Jinping on the sidelines of the Asia-Pacific Economic Cooperation (APEC) leaders' summit later this month in Shenzhen, China's technology hub.
A two-month extension of a trade truce between the two countries until January has provided some relief to exporters, although its longer-term prospects remain uncertain.
Wang Xin, head of the Shenzhen Cross-Border E-Commerce Association, an industry group, said US and European trade policies had created “a lot of difficulties” for Chinese businesses seeking to expand in those markets.
Strong exports have helped China offset sluggish domestic demand. The country's economy is forecast to meet Beijing's official annual growth target of 4.5 to 5 percent this year, slightly below last year's 5 percent expansion.
