United News of Bangladesh

China’s exports rose 36.3 percent year-on-year in September, putting the country on track to exceed last year’s record trade surplus as the European Union and other trading partners increase pressure on Beijing to address trade imbalances, customs data showed Wednesday. The export growth exceeded economists’ expectations and accelerated from 25 percent in August. It was the fastest pace since February, according to FactSet data, supported by strong overseas demand for high-tech products, including semiconductors and automobiles. Imports also grew 31 percent year-on-year in September, up from 28.2 percent in August. However, China’s trade surplus widened to $133.5 billion last month from $119.1 billion in August. For January-September, the surplus reached $938 billion, raising expectations that it could surpass the record $1.2 trillion recorded last year. Strong exports have supported China’s economic growth this year despite weak domestic consumption and investment amid a prolonged property sector downturn. However, China’s export strength faces growing challenges, said Ecaterina Bigos, a senior market strategist at BNP Paribas Asset Management. Although trade tensions between the United States and China have eased somewhat, the EU’s efforts to address trade imbalances are directly targeting China’s high-value exports, she said. Washington has launched an investigation into excess industrial capacity in China and other trading partners. However, the two countries agreed last month to extend their trade truce and reduce tariffs on $60 billion worth of goods. The 27-member EU has been struggling with a trade deficit with China exceeding $1.1 billion a day. EU trade chief Maroš Šefčovič said last week that an agreement had been reached with Beijing, including plans to halve Chinese hybrid car imports into the EU over the next few years. Cornell University economics and trade policy professor Eswar Prasad said many of China’s trading partners faced weak growth prospects and feared their manufacturing industries could be overwhelmed by Chinese exports. Policymakers have also raised concerns that a weaker Chinese yuan makes the country’s products cheaper in international markets, contributing to trade imbalances. Beijing has rejected claims that it deliberately devalues its currency to gain a competitive advantage, saying export growth reflects the strength of its industries. Customs data showed that the value of China’s semiconductor exports surged 108.1 percent year-on-year during the first nine months. Exports of automatic data processing equipment and parts increased 54.6 percent, while automobile exports rose 54.3%, driven by global demand for Chinese electric and hybrid vehicles. Bigos said China’s export-led growth depends on access to international markets. Although expanding trade with Southeast Asia and Latin America could help, those markets could not fully replace demand from Western economies. China’s dependence on high-tech exports could also face risks if global investment in artificial intelligence slows. Some US technology industry leaders have called for a worldwide pause in AI development over safety concerns. Max Zenglein, Asia-Pacific senior economist at The Conference Board, said a slowdown in global AI investment could pose a greater threat to China’s export growth than trade restrictions. Chinese leaders have set an economic growth target of 4.5-5 percent for 2026. The country is scheduled to release its July-September economic growth figures next week. The International Monetary Fund this week lowered its forecast for China’s 2026 economic growth to 4.5 percent, down 0.1 percentage point from its previous projection, warning that strong exports could not fully offset domestic economic weaknesses. Although Chinese officials have stressed the need to boost domestic demand, analysts say it has yet to become a priority this year. Authorities have recently introduced measures to support the economy, including subsidies for homebuyers’ mortgage interest payments.