China’s exports staged a strong recovery in September, rising 8.3% year-on-year, the fastest pace since March and well above expectations.
The rebound offers temporary relief for Beijing as it navigates renewed tensions with Washington, where President Trump has threatened to impose triple-digit tariffs in response to China’s new rare earth export restrictions.
Despite growing friction, China’s diversified trade strategy is paying off. Exports to the European Union, Southeast Asia, and Africa surged by 14%, 15.6%, and 56.4%, respectively, even as shipments to the United States plunged 27%. Analysts say Chinese firms are rapidly expanding into new markets, leveraging cost advantages to offset declining U.S. demand. “The United States now accounts for less than 10% of China’s direct exports,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
Still, the expansion has come at a cost. Exporters describe a “mad rat race” to capture market share, squeezing profit margins and forcing many factories to cut wages or reduce staff. The race to maintain competitiveness is adding pressure on Beijing to introduce domestic stimulus measures, particularly as weak consumer demand continues to weigh on growth.
Imports also rose sharply by 7.4%, the fastest increase since April 2024, driven by stockpiling of commodities like steel, coal, and soybeans. While higher imports signal industrial activity, analysts caution that the rise reflects strategic restocking rather than stronger household consumption.
China’s trade surplus narrowed to $90.45 billion from $102.33 billion in August, reflecting the evolving trade landscape. Economists warn that Trump’s tariff threats, if enacted, could trigger a deflationary shock and endanger factory jobs in China’s export sector.
Beijing and Washington are expected to pursue diplomatic talks ahead of the APEC summit in South Korea later this month. However, uncertainty remains high, with analysts predicting ongoing cycles of tension, escalation, and negotiation as the world’s two largest economies continue to redefine their trade relationship.