Are they “tired of winning” yet? China, I mean. Apparently not.

Xi Jinping’s now guaranteed to post a second consecutive annual trade surplus in excess of $1 trillion and may well surpass last year’s mark to set a new record.

That was the overarching takeaway from trade figures out of Beijing on Wednesday. Exports surged more than 36% last month, the customs update showed. That was far faster than economists expected and the quickest in seven months.

Imports, meanwhile, rose by more than a third versus the same period a year ago.

Higher prices, particularly for chips and AI-related equipment, but also for raw materials, are ballooning these figures. When measured in volume terms as opposed to value, neither shipments abroad nor incoming goods are rising as quickly.

Separate figures showed factory-gate prices in China rose 5% YoY in September, the quickest since June of 2022, a function of higher energy prices and, again, tech equipment.

Note the limited pass-through: Headline CPI rose just 0.9% in September, and core just 1%.

When taken with the trade figures, the lack of domestic pricing power implicit in the widest PPI-CPI spread since early 2022 underscores the notion that China’s foisting an engineered overcapacity problem onto the rest of the world. That’s the only way to keep up GDP appearances at a time when domestic demand continues to struggle.

Consider that China’s surplus with Europe jumped by more than a fifth in September from the same period a year ago to a record near $35 billion. That was before Brussels and Beijing struck a deal to limit Europe’s imports of Chinese hybrids, but that arrangement isn’t a “quick fix” to what some contend is an existential problem for European carmakers.

The figure above shows you Xi’s “progress” towards another $1 trillion year. He’s basically there already.

All “winning on trade” jokes aside, this isn’t necessarily a good news story for Beijing. As discussed at some length here, China’s economic strategy looks more unsustainable by the month.

I’ll repeat my ad nauseam talking point: Even if it were politically feasible for China to keep flooding the world with cheap goods — and it isn’t — it’s not mathematically possible. Global demand simply can’t keep up.

That raises the following obvious question: What happens when a combination of slower external demand and trade restrictions forces China to sell at home, into a domestic balance sheet recession? Nothing good, probably.

In any case, Beijing’s data suggests China ran a $34 billion surplus with the US last month, as sales into the American market expanded a whopping 40%. The resulting trade gap, which the USTR calculates differently, was the largest of Trump’s second term.