In January and February 2026, China’s trade surplus hit a record high of $213.62 billion. This was far above the anticipated $179.6 billion, showcasing the strength of China’s economy despite ongoing trade tensions with the U.S.
Exports surged by 21.8% year-on-year, while imports rose by 19.8%. This growth outperformed expectations significantly, with analysts predicting a mere 7.1% and 6.3% increase in exports and imports, respectively. The surge in trade can partly be attributed to the Lunar New Year holiday, which fell later this year, boosting consumer spending.
Interestingly, while trade with the U.S. fell by 16.9% to approximately $88.22 billion, trade with the European Union rose by 19.9%, and trade with ASEAN countries increased by 20.3%. This shift illustrates a growing pivot towards other markets amidst strained U.S.-China relations.
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, noted that the surprising export numbers suggest strong demand but do not guarantee further economic stimulus. The Chinese government, during its annual policy meetings, set a modest GDP growth target of 4.5% to 5%, the lowest since the early 1990s.
Additionally, the Consumer Price Index in China experienced a significant rise of 1.3% in February—more than the predicted 0.8%. This marked the biggest increase in over three years, following a smaller increase in January. The jump in inflation hints at recovering consumer confidence as the economy adjusts post-pandemic.
Trade tensions have been ongoing since January 2025, and despite fluctuating tariffs, the effective tariff rate on many imports from China is still around 30%, according to recent insights from business intelligence firm China Briefing. This suggests that while relief may be on the horizon, meaningful changes take time, especially in light of recent geopolitical meetings aimed at easing relations.
As of now, China seems poised to navigate these complexities while maintaining robust trade flows. This situation highlights the importance of adaptability in global trade dynamics.
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