The map of China’s electric and hybrid car exports is geopolitics in plain sight. The U.S. barely matters here, accounting for just 0.6% by value in Jan-Feb 2026. Europe, by contrast, took 40%.
In other words, China can withstand being largely shut out of the U.S. in this segment. It would be far harder to cope with Europe closing the door too.
China’s electric and hybrid car exports to the EU nearly doubled by value in Jan-Feb 2026. Hybrids led the surge: not-plug-in hybrids jumped 235% year on year and plug-in hybrids 149%, while electric car exports also posted a solid 57% increase.
China’s export push is spreading across all categories, but the EU mix does not fully match the global pattern. The clearest gap is in non-plug-in hybrids: overall export value rose 104%, but exports to the EU jumped 235%. Plug-in hybrids grew almost in line with the global trend, up 152% overall and 149% to the EU. All-electric cars also showed similar growth, with overall exports up 61% and exports to the EU up 57%.
Chinese new-energy vehicle exports to the EU are changing shape rather than retreating. The share of all-electric car exports to the EU is down to 52% from 65% one year ago.
China’s exports of new energy vehicles have started 2026 at a remarkable pace. In just the first two months of the year, export value jumped sharply across all three segments.
Plug-in hybrid export value surged 152% in the first two months of 2026. With non-plug-in hybrids also rising 104%, hybrids now look on track to overtake full-electric car exports this year.
The problem is not that Brussels failed to predict the rise of Chinese online platforms. It is that it watched the rise happen in the data and still reacted too slowly. While the EU was understandably absorbed by Brexit, Covid, inflation, war and elections, Chinese platforms (SHEIN, Temu, AliExpress,..) used those years to entrench themselves in the EU market. The result is that MEPs are making their first China visit in eight years to study a problem that had already become massive long before this trip was scheduled.
The January drop in EU exports to China was overwhelmingly dragged by Germany, even though part of that fall was offset by gains in France, Italy and Poland.
Before the latest Hormuz turmoil, China was already buying more crude oil. January-February imports rose 16% by volume year on year, with the Gulf still accounting for around 49% of the total. But the sharpest gains came from elsewhere: Russia was up 41% and Brazil 78%. In other words, the Gulf remained indispensable, yet China was already broadening its supply base before the new crisis hit.
The market was waiting for a Chinese New Year surge in outbound tourism. Instead, it got a reminder that the real rebound came a year earlier. SAFE travel expenditure fell from about US$50bn in Jan-Feb 2025 to US$43bn in Jan-Feb 2026, despite longer holidays designed to boost spending. The recovery is no longer gathering speed. The story of early 2026 is not renewed take-off, but fading momentum.
For the EU tourist sector, this is no longer just a matter of patience. A meaningful return of Chinese tourists now depends not only on China’s consumer mood, but also on geopolitics and the cost of getting to Europe. Since Russia’s invasion of Ukraine, the Europe-China air corridor has tilted in China’s favour: European airlines must detour around Russian airspace, while Chinese carriers still benefit from shorter routes. If Gulf tensions also keep fuel and flight costs elevated, Europe will need more than time for the big Chinese tourist wave to return.
For those interested in the exchange-rate effect, the year-on-year decline is 14% in US dollar terms, but 16% in yuan terms.
China’s IP deficit has widened structurally over the past decade. There have been pauses and partial corrections, but no lasting reversal. In recent years, the deficit has settled at a higher plateau, in the low-to-mid US$30bn range, well above the levels of the mid-2010s.
China is deepening its presence in the Maghreb, treating the region as a useful hub for connectivity and resource diversification. Beneath the usual language of mutually beneficial cooperation, Beijing’s approach has been notably uniform: it has largely avoided taking sides in intra-Maghreb disputes, while drawing all five states into the AIIB and the Belt and Road Initiative.
Brad Setser is spot on. Anyone interested in China trade, global imbalances and the way Beijing’s surplus is reshaping pressure on the EU should read this piece. It contains also a useful reminder.
“The old fashioned customs balance has one underrated virtue: it is counted accurately, and since the import and exporter data generally matches, it is largely immune from statistical manipulation.”