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Strong global demand for technology products is powering China’s export boom, even as its growing trade surplus puts pressure on trading partners and highlights India’s dependence on Chinese industrial supplies
China’s exports surged more than expected in September. For India, China is now its largest trading partner, but the two countries’ trade relationship remains heavily tilted in Beijing’s favour, with India’s deficit reaching $112.16 billion in 2025-26.
China’s exports rose 36.3 per cent year on year to $447.18 billion in September, accelerating from 25 per cent growth in August and exceeding economists’ expectations of 25.5 per cent, customs data showed on Wednesday. Imports increased 31 per cent to $313.65 billion, taking the monthly trade surplus to $133.53 billion.
The export growth was the fastest since February, when shipments rose 39.6 per cent. China’s trade surplus for January-September reached $938.11 billion, putting the country on course to exceed $1 trillion for a second consecutive year if its export momentum holds.
Why China’s export boom matters for India
Bilateral merchandise trade reached $151.1 billion in 2025-26, according to Indian government data. India’s exports to China rose 36.62 per cent to $19.47 billion, while imports increased 16 per cent to $131.63 billion.
The resulting trade deficit widened from $99.21 billion in 2024-25 to $112.16 billion in 2025-26, making China India’s largest trading partner by total goods trade.
China supplies machinery, electronic goods, computer equipment, integrated circuits, telecom components and lithium-ion batteries, among other products. These imports support Indian businesses across manufacturing and other sectors, but also expose domestic supply chains to disruptions and intensify competition for local producers.
More from BusinessAI demand supports China’s manufacturing engine
Technology demand is helping sustain China’s export momentum. Growing investment in artificial intelligence infrastructure is supporting demand for semiconductors, electronic components and equipment used in computing and electricity networks.
This external demand is providing a counterweight to subdued domestic consumption and investment, including persistent weakness in China’s property sector. Strong exports could give policymakers greater room to meet their annual economic growth target of 4.5 to 5 per cent without resorting to substantially stronger stimulus.
However, the recovery remains uneven. Separate data released on Wednesday showed that China’s factory-gate prices rose at their fastest pace in more than four years in September, while consumer inflation remained weaker than expected. The divergence points to mounting cost pressures for manufacturers even as household demand remains relatively soft.
Trade tensions cloud the outlook
China’s growing surplus is also intensifying scrutiny from its trading partners. The country recorded a trade surplus of nearly $1.2 trillion in 2025, drawing criticism from the United States and Europe over the imbalance between Chinese exports and imports.
An understanding between Beijing and the European Union on Chinese hybrid vehicle exports could weigh on automotive shipments to the bloc over time. However, exporters may seek to accelerate deliveries before any restrictions take effect. Meanwhile, an extension of the US-China tariff truce has eased some immediate pressure on trade.
China’s surplus for the first nine months of 2026 had already reached $938.11 billion. Any slowdown in overseas demand or additional trade restrictions could weaken an important source of economic growth and prompt Beijing to offer greater policy support.
