China's trade surplus narrows amid fiscal austerity

China's Q2 2026 GDP grew 4.3% year on year, the weakest since 2022 when COVID lockdowns were in effect.

China's trade surplus exceeded $1.2 trillion in 2025, but in the first half of 2026, the surplus was lower in dollar terms than a year before.

In June 2026, imports rose faster than exports (36% vs. 25% year on year), indicating the trade surplus is peaking.

Higher chip prices drove a 70% year-on-year increase in China's imports of integrated circuits in May 2026.

Despite a trade surplus, China's economy is stumbling into fiscal austerity, with GDP growth slower than expected.}