China's Goods Trade Surplus Tops $1 Trillion This Year, Forecast to Hit a 'Record High'

AI Boom Spurs Export Surge ... Trade Tensions Remain a Concern

Driven by a global increase in investment in artificial intelligence (AI), exports of high-tech products surged, pushing China's cumulative trade surplus for January-October above $1 trillion.

Containers are stacked at Ningbo-Zhoushan Port in Ningbo, Zhejiang Province, eastern China, on September 22. AFP-Yonhap News.

According to China's General Administration of Customs on November 10, exports in October totaled approximately $1.04259 trillion (about 1,395 trillion won), up 8% from approximately $964.82 billion in the same period a year earlier. While this was slightly slower than the 36.3% growth recorded in September, it exceeded the market forecast of 33.5%.

China's annual cumulative trade surplus has exceeded $1 trillion for the second consecutive year, following last year. It passed the $1 trillion mark a month earlier than it did last year.

China recorded strong export growth, buoyed by a global increase in investment in AI infrastructure. Demand for Chinese-made high-tech products rose sharply as companies around the world began building infrastructure such as AI data centers. By contrast, China's domestic market has struggled to recover amid a prolonged property downturn and weakening consumer sentiment.

Joe Faisel, chief macroeconomist at China-focused economic research firm Trivium China, said, "As Chinese manufacturers continue to expand their presence in overseas markets, the risk of additional tariffs and other trade barriers being introduced will remain high in 2027."

Trade tensions with the United States remain another source of uncertainty. On November 9, China officially announced a two-month extension of its trade truce with the United States, which had originally been due to expire on November 10. However, it said that expanding purchases of U.S. agricultural products would depend on whether the two countries implement their agreed reciprocal tariff cuts.

Following a summit between the two countries in Washington, D.C., last September, China and the United States proposed reciprocal tariff cuts totaling $60 billion, including approximately $17 billion worth of U.S. agricultural products.

China's trade surplus with the United States edged down from $34.01 billion in September to $32.71 billion in October. However, the large trade imbalance remains a major source of friction between the two countries.

China's imports in October rose 41.6% from a year earlier, far exceeding the market forecast of 32% and accelerating from September's 31% growth. Imports of crude oil fell 13.3% year over year, but volumes reached their highest level since March as disruptions to Middle Eastern oil supplies arose amid the war involving the United States, Israel and Iran.

China's growing trade surplus is expected to be a key issue at next week's Asia-Pacific Economic Cooperation (APEC) summit in Shenzhen. U.S. President Donald Trump and Chinese President Xi Jinping are expected to hold their third summit of the year on the sidelines of the meeting. Trade imbalances and tariff policies between the two countries are expected to be major agenda items.

In contrast to strong exports, China's domestic market remains sluggish. Analysts say the property downturn has hit household wealth and weakened consumer sentiment, making Chinese consumers reluctant to spend. Separate data released by China's auto industry also showed that while auto exports maintained solid growth in October, domestic sales fell for the 12th consecutive month.

Some analysts say the outlook for China's exports depends on how long the global AI investment boom lasts. Macquarie analysts said, "The export outlook depends on how long the AI boom lasts," forecasting that China's export growth will accelerate further in the fourth quarter of this year before slowing from the first quarter of 2027.

This content was produced with the assistance of AI translation services.