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China’s monthly car exports topped ۱m for the first time in June as overall overseas shipments from the world’s second biggest economy rose ۲۷%.
Official Chinese customs data showed that a stronger-than-expected trade performance kept China on track to match or beat last year’s record trade surplus of $۱tn (£۷۴۸bn), achieved despite Donald Trump’s curtailed tariff war.
Sales of Chinese brands ranging from BYD to Jaecoo are booming, eating into the market shares of long-established brands, particularly in Europe.
Analysis by the Mercator Institute for China Studies (Merics) in Berlin showed that China ran a €۹۰۰m-a-day (£۷۶۷m) goods surplus with the EU in the first half of ۲۰۲۶, risking heightened tensions with the US and the EU, which has previously accused China of “weaponising” trade as foreign policy.
Exports to the EU increased ۱۲.۷% year on year, pushing the surplus to ۱.۲۲۵tn yuan (£۱۳۵bn).
Exports of electric vehicles and hybrid cars, which escaped the EU’s ۲۰۲۴ tariffs on Chinese EVs, have put the European industry under huge pressure, with recent warnings of a collapse in employment in the sector.
Volkswagen, Europe’s largest car manufacturer, is planning to reduce its ۶۷۰,۰۰۰-strong workforce by up to ۱۰۰,۰۰۰ as part of wide-ranging restructuring plans put to its supervisory board last week.
While proposals to close four plants were not approved by the board, their future is still under discussion as part of what the chief executive, Oliver Blume, on Monday called the “most comprehensive realignment in the company’s history”.
Rafael Jimenez Buendía, a trade expert who analysed the figures for Merics, said the export surge into the EU beat its own forecast of record sales.
It had expected China’s exports to the EU to reach a new first-half record of ۲.۱۲tn yuan but the data released on Tuesday put it ۴۵bn yuan ahead, at ۲.۱۶۵tn yuan.
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China’s export rise was also fuelled by orders for chips amid a global AI boom, with data showing exports of ۳۲bn integrated circuits.
The country’s high export figures have been partly attributed to continued suppressed domestic demand, fuelling fears of the impact of what many have described as China shock ۲.۰, a repeat of the exports surge in the ۲۰۰۰s to the US.
The ratio of annual exports to total manufacturing sales hit ۲۴% over the first four months of this year, according to a recent report by Gavekal Dragonomics, a consultancy, the highest level since China’s accession to the World Trade Organization in ۲۰۰۱. In ۲۰۱۹, the ratio stood at ۱۸.۳%, rising to ۲۲.۳% last year.
“That would be considered high for a small export-focused country; for the world’s second largest economy, it is remarkable,” the report said.
