On November 10, the General Administration of Customs released China’s foreign trade figures for October.
In U.S. dollar terms, imports and exports totaled $719.38 billion in October, 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.
From January through October, total trade reached $6.52 trillion, up 25.3%. Exports were $3.78 trillion, up 22.7%, and imports were $2.74 trillion, up 29.0%. 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.
For the first ten months, trade reached 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. The figures are from the General Administration of Customs.
AI-related exports remain strong
Dollar exports rose 35.2% in October, slightly below the prior reading of 36.3% but still at a rapid pace.
Galaxy Macro said resilient global activity, an AI industry still in a period of extremely high momentum, continued strong new-energy vehicle exports, and higher prices all supported export growth.
Integrated-circuit exports rose 137.1% year on year (136% previously). Exports of automatic data-processing equipment and parts rose 114.8% (92.9% previously).
Feng Lin, executive director of the research and development department at Orient Jincheng, said that although global AI valuations have seen two rounds of adjustment since the second half of the year, the global AI investment boom has not yet faded. Further price increases in chips and other electronics lifted chip export growth and remain a main reason export growth has stayed high since the start of the year.
Data from the Passenger Car Market Information Joint Conference of the China Automobile Dealers Association show new-energy passenger-vehicle exports of 582,000 units in October, up 144.7% year on year and 3.9% from September. These vehicles accounted for 62.8% of passenger-vehicle exports, 20 percentage points higher than a year earlier. Galaxy Macro said an energy shock has further widened the cost advantage of new-energy vehicles over conventional fuel vehicles, while an adjustment to export tax rebates has opened a window for shipments ahead of the change, keeping new-energy vehicle exports strong.
Higher prices also supported exports. Wen Bin, chief economist at China Minsheng Bank, cited three factors: Brent crude futures prices rose sharply at one point, and China’s prices for means of production also increased in October amid external conditions; AI investment pushed up prices for raw materials, chips, servers and consumer electronics together; and higher upstream chemical prices continued to pass through to downstream products.
By destination, shipments to the United States and the European Union recovered and supported overall growth. Exports to the United States rose 32.9% and exports to the EU rose 24.3%. Both were slower than the previous month but remained elevated. Wen Bin said the pickup in exports to the United States reflected seasonal factors and warmer economic and trade ties. China and the EU recently reached a quota agreement on hybrid-vehicle trade. With hybrid exports to the EU expected to face limits in 2027, automakers have been shipping before the measures take effect, helping keep exports to Europe strong.
Energy imports and AI goods accelerate import growth
Dollar imports rose 41.6% in October, up from 31.0% the month before.
The value of crude-oil imports rose 41% (3.3% previously). CICC Macro said the impact of conflict in the Middle East has increased, energy prices have risen further, and higher energy imports were the main marginal contributor to overall import growth.
Faster development of the AI industry has also kept demand for related goods strong. Integrated-circuit imports rose 78.3% (74.7% previously), and imports of automatic data-processing equipment and parts rose 261% (296.5% previously).
Feng Lin said a low base a year earlier gave some support to the October comparison. China’s trade also features large flows in both directions and a relatively high share of processing trade, so continued strong exports in October necessarily kept import growth high.
What analysts expect next
Wen Bin said export growth is likely to stay in double digits, though it may slow at the margin because of a high base a year earlier. He cited continued strong global AI investment and warmer trade relations with the United States as supports. He also noted risks: tighter policy at major central banks could weigh on growth; higher prices are beginning to restrain demand; and China-EU economic relations remain relatively tense, with the EU, after hybrid vehicles, starting to plan similar trade-safeguard measures for chemicals, furniture and machinery.
On imports, Feng Lin said international oil prices have fallen noticeably since November, so the lift from higher crude-import prices is expected to weaken. With the year-earlier import base also higher overall, November’s year-on-year import growth is expected to ease somewhat. Even so, with exports likely to keep growing relatively quickly, integrated-circuit imports remaining strong, and policies aimed at stabilizing growth offering some support to domestic demand, November import growth is expected to stay around 30%.
Galaxy Macro said that, looking toward 2027, global trade volumes are expected to recover moderately, growth in AI capital spending is expected to slow, and the contributions from higher prices and a high base are also expected to fade. China’s industrial base, flexibility in releasing capacity, and shift toward higher-end products should still provide underlying momentum. Under these factors, export growth is likely to fall back into the double digits, with the drivers shifting from price and scale advantages toward a premium for supply-chain resilience and new quality productive forces. Overall resilience is expected to exceed what cyclical swings alone would imply.
Original article: https://m.thepaper.cn/newsDetail_forward_34446211
