China's Trade Surplus Passes $1 Trillion by October as AI Hardware Drives Exports

In October alone, exports rose 35.2% from a year earlier to $412.33 billion, according to the General Administration of Customs. That beat the 33.5% growth economists polled by Reuters had expected, though it was a little slower than September's 36.3%. Imports grew 41.6% to $307.05 billion, well above the 32% median forecast. That left a monthly surplus of $105.28 billion, up from $88 billion a year earlier.

For anyone tracking the AI build-out, the figures show how much of the hardware boom passes through Chinese factories. Demand for AI-related goods has made up for weak consumption at home and a long property slump, leaving Beijing more dependent on overseas buyers. China set a full-year record surplus of about $1.19 trillion in 2025, and this year's total is on course to beat it.

The surplus with the United States narrowed to $32.71 billion in October from $34.01 billion in September, as growth in exports to the US slowed to 32.9% from about 39.6%. Shipments to the European Union rose 24.4%, down from 25.3% the month before. From January to October, China's surplus with the EU reached $310.7 billion, up from $241.6 billion in the same period of 2025.

Europe is pushing back against that imbalance. The EU has called for further trade curbs following an agreement that limits exports of Chinese hybrid vehicles, and analysts expect some exporters to bring shipments forward before those measures take effect. "The risk of additional tariffs and other trade barriers will remain elevated in 2027," said Joe Peissel, lead macroeconomist at Trivium China.

Car exports kept growing in October even as domestic vehicle sales fell for a 12th month in a row. Crude oil imports reached their highest level since March.

Macquarie analysts said the export outlook "depends on how long the AI boom will last." They expect exports to speed up in the fourth quarter and then slow from the first quarter of 2027.

The data comes just before a diplomatic test. Beijing has extended its trade truce with Washington by two months beyond its November 10 expiry. It has also made any increase in purchases of US farm goods conditional on the proposed reciprocal tariff cuts taking effect, part of a roughly $60 billion package that includes about $17 billion of American agricultural products. Xi Jinping and Donald Trump are expected to meet at the APEC summit in Shenzhen next week.