China’s trade surplus reaches $938 billion as exports surge 36.3% and as pressure mounts for it to rebalance trade with Europe

China’s exports surged 36.3% in September from a year earlier, its customs agency said Wednesday, bringing it on track to exceed last year’s record trade surplus as pressure ramped up from its trading partners, including the European Union, to rebalance trade.

The exports data, which was better than what economists had expected, accelerated from the 25% growth in August.

High-tech goods such as semiconductors and autos have helped fuel its rising shipments overseas.

September’s export growth pace was the fastest since February, according to FactSet data.

Imports climbed 31% in September year-on-year, also accelerating from August’s 28.2% rise.

Still, China recorded a $133.5 billion trade surplus last month, widening from $119.1 billion in August.

For the first nine months, China’s trade surplus reached $938 billion, with expectations growing that it could surpass last year’s full-year $1.2 trillion record .

Strong exports have helped drive China’s overall economic growth this year, at a time when domestic consumption and investment remained sluggish, weighed on by a yearslong real estate sector downturn .

However, China’s export resilience is now faced with mounting challenges, said Ecaterina Bigos, a senior market strategist at BNP Paribas Asset Management.

“While U.S.-China trade tensions have eased somewhat, the EU’s push to rebalance directly targets high-value exports,” she said.

The U.S. has launched an ongoing probe against China and other trading partners this year on their excess industrial capacity, although Washington and Beijing last month reached an agreement to extend their trade truce and cut tariffs on $60 billion worth of goods .

The 27-nation EU has particularly been struggling to rebalance a trade deficit exceeding $1.1 billion a day with China.

EU trade chief Maroš Šefčovič, following his visit to Beijing where he met his Chinese counterpart Wang Wentao last week, said a deal has been reached with Beijing, including halving Chinese hybrid car imports into the EU over the next few years.

Many of China’s trading partners are facing weak growth prospects and are fearful of their manufacturing industries being overrun by exports from China , said Eswar Prasad, a professor of economics and trade policy at Cornell University.