China’s monthly car exports exceeded 1 million units for the first time in June, underscoring the scale of the country’s export push as overall overseas shipments climbed 27%, according to official customs data. The stronger-than-expected performance suggests the world’s second-largest economy is still positioned to match or potentially surpass last year’s record trade surplus of $1tn, despite the impact of Donald Trump’s reduced tariff campaign.
The latest figures point to especially rapid growth in Chinese vehicle brands such as BYD and Jaecoo, which are gaining ground abroad and taking share from established rivals, particularly in Europe. The shift has raised concerns among policymakers and industry groups in the US and EU, where China is increasingly viewed as using trade as a strategic lever. Analysis from the Mercator Institute for China Studies in Berlin showed that China recorded a €900m-a-day goods surplus with the EU in the first half of 2026, with exports to the bloc rising 12.7% year on year to 1.225tn yuan.
Electric vehicles and hybrids have played a major role in that expansion. According to the report, those vehicles have largely avoided the EU’s 2024 tariffs on Chinese EVs, adding pressure to European manufacturers already warning about job losses and restructuring. Volkswagen, Europe’s biggest carmaker, is considering cuts of up to 100,000 jobs as part of a wider overhaul, although proposed plant closures were not approved by its supervisory board.
Beyond autos, China’s export strength has also been supported by demand for chips linked to the global AI boom. Customs data showed exports of 32bn integrated circuits. Analysts say the scale of the export surge is also tied to weak domestic demand, reviving worries about a new version of “China shock” as manufacturing becomes increasingly reliant on overseas sales. A recent Gavekal Dragonomics report said the ratio of annual exports to total manufacturing sales reached 24% in the first four months of this year, the highest since China joined the World Trade Organization in 2001.
Source: theguardian.com
