China October Exports Rise 35.2% as Imports Surge 41.6%, Surplus Narrows

China's exports increased by 35.2% year-on-year in October, exceeding expectations of a 33.5% rise and slightly slowing from September's 36.3% growth. Imports jumped by 41.6%, surpassing the anticipated 32% increase and accelerating from 31% in September. The import surge was driven largely by tech goods, critical minerals like copper, and energy supplies including liquefied natural gas, oil, and coal.

The trade surplus narrowed significantly to $105.3 billion in October, the lowest since April, while the year-to-date surplus reached $1.04 trillion, below last year's $1.2 trillion record. Exports to the U.S. rose 32.9% with imports from the U.S. up nearly 35%, creating a $32.7 billion surplus. Despite strong export growth and moderate policy support targeting 4.5%-5% economic growth, domestic demand remains weak with retail sales up only 1.1% in September.

The data shows China’s export momentum largely rests on demand for chips and AI hardware. However, signs of factory activity contraction and slowing new orders indicate potential headwinds. For investors, the narrowing surplus and reliance on exports over domestic consumption highlight ongoing economic imbalances that could affect China's trade-dependent growth and influence global supply chains.