On November 10, China’s General Administration of Customs released October foreign-trade figures. In U.S. dollar terms, imports and exports totaled $719.38 billion, up 37.9% from a year earlier. Exports were $412.33 billion, up 35.2%, and imports were $307.05 billion, up 41.6%. The trade surplus was $105.28 billion.
For January through October, dollar-denominated trade totaled $6.52 trillion, up 25.3%. Exports were $3.78 trillion, up 22.7%; imports were $2.74 trillion, up 29.0%; and the surplus was $1.04 trillion.
In yuan terms, October trade totaled 4.87 trillion yuan, up 31.2%. Exports were 2.79 trillion yuan, up 28.7%; imports were 2.08 trillion yuan, up 34.7%; and the surplus was 712.78 billion yuan.
From January through October, yuan-denominated trade totaled 44.81 trillion yuan, up 20%. Exports were 25.99 trillion yuan, up 17.6%; imports were 18.82 trillion yuan, up 23.6%; and the surplus was 7.16 trillion yuan.
Exports remain strong, led by AI-related goods
October’s 35.2% dollar export growth was slightly below the previous reading of 36.3%, but still rapid. Galaxy Macro attributed the pace to resilient global activity, very strong conditions in the AI industry, continued high growth in new-energy vehicle exports, and price increases that continued to lift export growth.
Integrated-circuit exports rose 137.1% in value, compared with 136% previously. Exports of automatic data-processing equipment and parts rose 114.8%, up from 92.9%.
Feng Lin, executive director of the research and development department at Dongfang Jincheng, said that although global AI valuations had undergone two adjustments since the second half of the year, the global AI investment boom had not yet weakened. Feng said rising prices for chips and other electronic products were still intensifying, pushing chip export growth higher and forming the main support for strong export growth since the start of the year.
According to the Passenger Car Market Information Joint Branch of the China Automobile Dealers Association, China exported 582,000 new-energy passenger vehicles in October, up 144.7% year on year and 3.9% from September. They accounted for 62.8% of passenger-vehicle exports, 20 percentage points higher than a year earlier. Galaxy Macro said the energy shock further widened the cost advantage of new-energy vehicles over conventional fuel vehicles, while an adjustment to new-energy export tax rebates created a window for rushed shipments.
Wen Bin, chief economist at China Minsheng Bank, also pointed to prices. Wen said Brent crude futures had at one point risen sharply and that China’s producer-goods prices rose in October amid external conditions. Wen added that AI investment lifted prices across raw materials, chips, servers and consumer electronics, while higher upstream chemical prices continued to pass through downstream.
By destination, exports to the United States and the European Union rose 32.9% and 24.3%, respectively. Both slowed from the previous readings but remained high. Wen said the pickup in shipments to the United States reflected seasonal factors and warmer bilateral economic and trade relations. Wen also said China and the EU had recently reached a quota agreement on hybrid-vehicle trade; with hybrid exports to Europe expected to face limits in 2027, automakers accelerated shipments before the policy took effect.
Imports accelerate on energy and AI goods
Dollar imports rose 41.6%, accelerating from 31.0% previously. Crude-oil imports rose 41% in value, compared with 3.3% previously. CICC Macro said the impact of the Middle East conflict had increased and that higher energy prices pushed up energy imports, providing the main marginal addition to overall imports.
Imports tied to AI also grew quickly. Integrated-circuit imports rose 78.3%, up from 74.7%, while imports of automatic data-processing equipment and parts rose 261%, down from 296.5% but still very high. CICC Macro said strong demand for these goods helped lift total import growth.
Feng said a low import base a year earlier supported the October comparison. Feng also said China’s trade features large exports alongside large imports and a relatively high share of processing trade, so continued strong exports necessarily kept import growth elevated.
Analysts expect fast growth to continue, with some easing
Wen said export growth is likely to remain in double digits, though it may slow at the margin because of a high base a year earlier. Cited supports included continued strong global AI investment and warmer trade relations with the United States. Wen also flagged risks: tighter monetary policy at major central banks could weigh on growth; higher prices are beginning to restrain demand; and China-EU economic relations remain relatively tense. After hybrid vehicles, Wen said, the EU has begun planning similar trade-safeguard measures for chemicals, furniture and machinery.
On imports, Feng said international oil prices have fallen noticeably since November, so the boost from higher crude-import prices is expected to weaken. With last year’s import base also rising overall, Feng expects November’s year-on-year import growth to ease. Even so, Feng said exports should keep growing relatively quickly, integrated-circuit imports should remain strong, and policies aimed at stabilizing growth should give some support to domestic demand. Feng expects November import growth to stay high at around 30%.
Looking toward 2027, Galaxy Macro said global trade volumes are expected to recover moderately, AI capital-spending growth is expected to slow, and both the contribution from higher prices and the high-base effect should fade. It said China’s industrial base, capacity flexibility and shift toward higher-end products should still provide momentum. Under those combined factors, it said export growth is likely to fall back to a double-digit pace, with the driver shifting from price and scale effects toward supply-chain resilience and what it called new quality productive forces. It said overall resilience should exceed what a normal cyclical swing would suggest.
Original article: The Paper
