China’s Trade Data in October: A Mixed Picture

In October 2026, China’s trade performance exhibited growth in both exports and imports, surpassing analysts’ expectations. However, a notable decrease in the trade surplus raised concerns within the international community as the economy continued to grapple with various challenges.

Surge in Exports and Imports

According to official statistics released recently, goods exports rose by 35.2% year-on-year in October, slightly higher than the anticipated increase of 33.5% as surveyed by Reuters. This marks a decrease from the 36.3% growth recorded in September.

Imports saw an even more significant uptick, climbing by 41.6% compared to the same month in the previous year. This figure exceeded analysts’ expectations of a 32% increase and represented a substantial jump from the 31% growth noted in September. The increase in imports is attributed largely to heightened demand for technology-related products, essential minerals such as copper, and energy supplies encompassing liquefied natural gas (LNG), oil, and coal, as pointed out by Tianchen Xu, Senior Economist at Economist Intelligence Unit.

October Trade Surplus Declines

The monthly trade surplus for October diminished to $105.3 billion, the lowest level since April. This brings the year-to-date surplus to $1.04 trillion, down from a record $1.2 trillion achieved in the entirety of 2025. This shrinking surplus comes amid calls from trading partners urging China to bolster domestic demand to better balance its economy.

Factors Influencing Import Growth

Significantly, imports of high-tech products soared by 72% in value compared to the previous year. Further reinforcing the demand for energy resources, imports of crude oil, LNG, and coal experienced remarkable growth, up approximately 41%, 50%, and 60%, respectively.

This robust performance in imports has been critical, especially as policymakers look to maintain moderate economic support to achieve the country’s annual growth target of between 4.5% and 5%. However, underlying issues persist, with household consumption remaining weak; retail sales in September reportedly increased by a modest 1.1%, indicating ongoing imbalances within the economy.

Global Market Influences

The recent export boom can largely be attributed to strong demand for technological goods, particularly chips and other artificial intelligence-related hardware. However, analysts warn that a slowdown in global AI investments could diminish this momentum, potentially pressuring the profit margins of Chinese exporters. Nguyen Hoang Nam, an economist with Capital Economics, noted a projected 2% month-on-month decline in exports, attributing this to a decrease in new domestic and export orders.

Trade Relations with Major Partners

China’s exports to the United States showcased significant growth, rising by 32.9% year-on-year alongside a nearly 35% increase in imports, establishing a surplus of $32.7 billion. The rising shipments to the U.S. account for a 12.1% increase for the year as of October, benefitting from a relatively low base effect from last year when shipments had decreased due to substantial tariff hikes.

In light of ongoing trade discussions, Washington and Beijing have extended a broader trade truce until January, while also implementing various trade measures such as export-control waivers on certain critical minerals and special port fees for each nation’s vessels.

Additionally, a recent agreement between the European Union and China aims to regulate the imports of hybrid vehicles as part of broader initiatives to address trade imbalances. China’s shipments to the EU surged by 24.4%, while imports fell by over 4%, broadening the surplus to $33.4 billion.

Outlook for Future Trade

Despite the EU’s upcoming import restrictions on hybrid vehicles, analysts suggest that these limitations are unlikely to significantly hinder China’s export growth. The cap on 350,000 hybrid vehicle imports annually exceeds the 300,000 units exported to Europe last year but falls short of the 800,000 units reported in the recent quarterly averages. Brad Setser, Senior Fellow at the Council on Foreign Relations, highlighted that Europe still lacks a coherent trade policy with respect to autos and broader trade relations with China.