China’s Trade Surplus With EU Hits Record as Tensions Intensify

China’s trade surplus with the European Union climbed to a fresh high, keeping the issue of growing imbalances high on the agenda as the bloc weighs new measures to shield local industries.

With exports to the EU soaring to a record, China’s surplus with the bloc rose 27% from a year earlier to $32.9 billion in June , according to Chinese customs data released on Tuesday. The country’s surplus with Germany more than doubled year-on-year while plunging 81% with France.

“Trade imbalances with the EU continued to rise,” Macquarie Group Ltd. economists led by Larry Hu said in a report. “Despite a three-month , the growing surplus keeps the risk of a China–EU trade conflict elevated.”

The lopsided trading relationship will likely exacerbate concerns in Europe about excess Chinese manufacturing capacity. Chinese exports have despite weak domestic demand, helping support growth at home but fueling complaints overseas that a flood of lower-cost goods is putting pressure on local producers.

For the first half of the year, China imported $135.6 billion of goods from the EU, up 9% from a year earlier. Meanwhile its exports amounted to $312.3 billion during the period, a gain of 17%.

European leaders have increasingly cast the trade imbalance as a strategic challenge rather than a purely economic issue.

French leader Emmanuel Macron called the situation a matter of for European industry after his visit to Beijing late last year. Chinese officials, by contrast, have emphasized the benefits of open trade and economic cooperation, while for greater European access to China.

On Monday, German Chancellor Friedrich Merz urged “a political currency dialogue with China,” returning to the country’s exchange rate as a source of its trade advantage.

Based on a range of metrics including purchasing power parity and external balances, the yuan is around against the shared currency, compared with 20% a year ago, Deutsche Bank AG strategist Shreyas Gopal wrote in a report published Monday.

The Chinese currency has appreciated more than 6% versus the euro this year, advancing last month to the strongest level since March 2025. Nevertheless, it’s still about 13% weaker than its 2022 peak.

Chinese Commerce Minister Wang Wentao and Foreign Minister Wang Yi have both called for an “upward balance” in bilateral trade, arguing that the solution lies in expanding economic cooperation rather than restrictions. Beijing and Brussels have agreed to set an October deadline to make progress on trade disagreements, according to EU trade chief Maros Sefcovic .

Read More:

Still, the two sides remain far apart on how to address mounting tensions. European policymakers have pressed Beijing to curb industrial overcapacity and reduce subsidies they say distort competition, while China has shown little appetite for limiting exports that have become an increasingly important driver of economic growth.

Deutsche Bank said its analysis found that Germany is particularly uncompetitive against China, based on where it estimates the European country’s former currency would be trading.

“Nearly all our models suggest that the undervaluation of the yuan is more pronounced against a hypothetical Deutschmark than that of the euro, illustrative of how Germany’s competitiveness challenge is larger than the wider euro area,” Gopal wrote.