China's exports and imports both exceeded analyst expectations in October, though the country's trade surplus contracted sharply to its lowest level in six months. Goods exports jumped 35.2% from a year earlier, surpassing a Reuters poll forecast for 33.5% growth but slowing from 36.3% expansion in September. Imports climbed 41.6% last month, according to customs data, far outpacing expectations for a 32% rise and marking the strongest import growth since May 2021.
The October trade surplus fell to $105.3 billion, according to LSEG data, down from higher levels earlier in the year and below analyst expectations. Despite the monthly decline, China's year-to-date surplus reached $1.04 trillion, compared with a full-year record of $1.2 trillion in 2025. The surge in imports was primarily driven by demand for technology-related goods and critical raw materials, according to Tianchen Xu, senior economist at Economist Intelligence Unit. High-tech product imports soared 72% in value from a year earlier, while imports of crude oil, liquefied natural gas and coal grew approximately 41%, 50% and 60% respectively, according to CNBC's analysis of official figures.
The strength in export demand has enabled Chinese policymakers to maintain moderate policy support while pursuing the country's annual growth target of 4.5% to 5%. However, household consumption remains weak, with retail sales growing only 1.1% in September, highlighting economic imbalances. Much of the export momentum reflects strong global demand for Chinese semiconductors and artificial intelligence-related hardware, but analysts warn that any slowdown in the global AI buildout could pressure Chinese exporters. Factory activity unexpectedly shrank in October as overseas orders cooled, China Beige Book data showed, prompting Capital Economics economist Nguyen Hoang Nam to estimate a seasonally adjusted 2% month-on-month decline in exports.
China's bilateral trade with the United States showed similar strength, with exports to America rising 32.9% in value and imports growing nearly 35%, creating a $32.7 billion surplus. Washington and Beijing extended their trade truce by two months to January following a September agreement that included export-control waivers for certain critical minerals. Chinese President Xi Jinping and President Donald Trump are expected to meet next week at the APEC leaders' summit in Shenzhen. The European Union reached a separate agreement last month to cap Chinese hybrid vehicle imports at 350,000 units annually starting December 1, well above the 300,000 hybrids China exported to Europe last year but below the 800,000-unit annualized pace of the past three months, according to Brad Setser at the Council on Foreign Relations.
For Chinese savers and investors, the trade data reflects robust export demand but also suggests domestic consumption remains constrained, with limited investment opportunities tied to domestic growth.