China's trade surplus tops $1 trillion as AI exports surge

China's exports and imports both surged in October, exceeding economists' forecasts as global demand for artificial intelligence hardware powered high-tech shipments. Goods exports rose 35.2 percent from a year earlier, slowing only slightly from September's 36.3 percent increase but beating the forecast of 33.5 percent. Imports climbed 41.6 percent, accelerating from 31 percent in September and sharply beating estimates for a 32 percent rise.

The trade surplus reached $1.04 trillion in the first 10 months of the year, crossing the $1 trillion mark for a second consecutive year and arriving one month earlier than in 2025. The monthly surplus fell to $105.3 billion in October, its lowest level since April.

“The risk of additional tariffs and other trade barriers will remain elevated in 2027, particularly as Chinese manufacturers continue expanding their presence in overseas markets.”

Beijing's growing reliance on overseas demand reflects weak household consumption and a prolonged property slump. Retail sales grew only 1.1 percent in September, underscoring the imbalance in the world's second-largest economy.

The swelling surplus risks sharpening trade tensions with major partners, including the European Union, where leaders have called for more curbs on Chinese goods. China also extended a trade truce with Washington by two months ahead of its November 10 expiry.

A separate China Beige Book survey showed new domestic and export orders slowed in October compared with a year earlier, while official PMI data indicated unexpected contraction in factory activity as overseas orders weakened.

Policymakers can continue relying on moderate policy support to meet the annual growth target of 4.5 to 5 percent because export strength remains robust. However, any slowdown in the global AI buildout could dent momentum and squeeze exporters' margins.