On November 10, the General Administration of Customs released China’s October foreign trade data.
October in U.S. dollars
Total imports and exports were $719.38 billion, up 37.9% year on year. 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 to October, total imports and exports were $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.
October in yuan
Total imports and exports were 4.87 trillion yuan, up 31.2% year on year. Exports were 2.79 trillion yuan, up 28.7%, and imports were 2.08 trillion yuan, up 34.7%. The surplus was 712.78 billion yuan.
From January to October, totals were 44.81 trillion yuan, up 20%. Exports were 25.99 trillion yuan, up 17.6%, and imports were 18.82 trillion yuan, up 23.6%. The surplus was 7.16 trillion yuan.
Data source: General Administration of Customs.
AI-related exports remain elevated
In dollar terms, October exports rose 35.2% year on year, slightly below the prior reading of 36.3% but still strong.
Galaxy Macro said resilient global activity, an AI industry still in a period of extremely high momentum, continued rapid growth in new-energy vehicle exports, and price increases continued to support export growth.
Integrated-circuit export value rose 137.1% year on year (previous: 136%). Exports of automatic data-processing equipment and parts rose 114.8% (previous: 92.9%).
Feng Lin, executive director of the research and development department at Oriental Jincheng, said that although global AI valuations underwent two rounds of adjustment in the second half, the global AI investment boom has not weakened. Price increases for chips and other electronics are still spreading, lifting chip export growth and remaining a main reason for strong export growth since the start of the year.
According to the passenger-car market information joint conference of the China Automobile Dealers Association, new-energy passenger-vehicle exports were 582,000 units in October, up 144.7% year on year and 3.9% from the previous month. They accounted for 62.8% of passenger-vehicle exports, 20 percentage points higher than a year earlier.
Galaxy Macro said energy shocks have further widened the cost advantage of new-energy vehicles over conventional fuel vehicles. An adjustment to new-energy vehicle export rebates also opened a window for front-loaded shipments, keeping those exports strong.
Price increases also supported exports. Wen Bin, chief economist at China Minsheng Bank, pointed to three factors: Brent crude futures rose sharply at one point and, under external conditions, China’s producer-goods prices also increased in October; AI investment lifted prices for raw materials, chips, servers and consumer electronics together; and higher upstream chemical prices continued to pass through downstream.
By destination, exports 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 slowed from the prior month but remained high. Wen Bin said the rebound in shipments to the United States reflected seasonal factors and warmer economic and trade relations. 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 accelerated shipments before the measures take effect, supporting exports to Europe.
Energy and AI goods lift import growth
In dollar terms, October imports rose 41.6% year on year, accelerating from 31.0% previously.
Crude-oil import value rose 41% (previous: 3.3%). 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 addition to overall imports.
Faster AI-industry development also strengthened demand for related goods. Integrated-circuit imports rose 78.3% (previous: 74.7%), and imports of automatic data-processing equipment and parts rose 261% (previous: 296.5%).
Feng Lin said a low import base a year earlier gave some support to the October comparison. China’s trade also features large export and import flows and a high share of processing trade, so continued strong exports in October kept import growth elevated.
Outlook
Wen Bin said export growth is likely to remain in double digits but may slow at the margin because of a high base a year earlier. Supports include continued strong global AI investment and warmer economic and trade relations with the United States. Risks include tighter policy at major central banks that could weigh on growth, an emerging drag from higher prices on demand, and relatively tense China-EU trade relations. After hybrid vehicles, the EU is planning 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, November import growth is expected to ease. Even so, with exports likely to stay relatively fast, integrated-circuit imports remaining strong, and policies to stabilize 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, AI capital-expenditure growth is expected to slow, and contributions from price increases and base effects are expected to fade. China’s industrial base, flexibility to release capacity, and shift toward higher-end products should still provide endogenous momentum. Taken together, export growth is likely to ease back into the double digits, with drivers shifting from price and scale effects toward supply-chain resilience and newer productive capacity. Overall resilience is expected to exceed a normal cyclical slowdown.
Original article: https://m.thepaper.cn/newsDetail_forward_34446211
