China exports seen maintaining strong October growth as trade surplus widens

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China export growth and surplus

Highlights

China's goods exports are expected to rise 33.5% year on year in October and imports by 32%, with the trade surplus forecasted at $125.8 billion.
AI infrastructure demand has driven Chinese exports of printed circuit boards, memory chips, and optical transceivers, despite capacity shortages, supporting robust export momentum.
Rising trade surpluses are intensifying EU and U.S. tensions, while weak retail sales growth of 1.1% in September and worsening factory conditions signal domestic economic imbalances.

October trade forecasts and AI-led demand

As reported by Reuters, a poll of economists points to China's goods exports rising 33.5% year on year in U.S. dollar terms in October, slightly below September's 36.3% increase, with the official trade data due on Tuesday.

The same poll forecasts imports rising 32% in October after a 31.0% gain in September. Analysts expect the monthly trade surplus to ease to $125.8 billion from $133.53 billion in September, while still pushing the surplus for the first 10 months of 2026 above $1 trillion.

A global push to build infrastructure for advanced AI models has lifted the value of China's outbound shipments this year. Xu Tianchen, senior economist at the Economist Intelligence Unit, said key hardware including printed circuit boards, memory chips and optical transceivers is still facing capacity shortages, which should keep export momentum solid through the rest of the year.

Trade tensions and domestic imbalances

The expanding surplus is likely to sharpen concern in the European Union and keep trade relations with Washington under pressure. The EU agreed with Beijing last month to limit Chinese exports of hybrid vehicles to the bloc over the next few years, but the measure has not yet taken effect, raising expectations that exporters will front-load shipments in the near term.

Strong exports are helping China stay on track for the government's 4.5% to 5% annual GDP growth target, even as household consumption remains weak. Falling property values, poor job security and subdued sentiment continue to weigh on demand, while official data showed retail sales rose just 1.1% year on year in September.

Factory conditions also worsened in October from the previous month, according to an official survey, with gauges for new orders and new export orders both showing contraction. ANZ analysts said the deterioration in new export orders may offer an early warning of a softer AI technology cycle, although some other analysts expect the global AI boom to remain buoyant in the coming months.

Our earlier coverage of Lenovo’s planned Tech World 2027 showcase outlined how the company is positioning its Hybrid AI strategy across consumer devices and enterprise systems, with a focus on privacy, security, and data control. The piece also highlighted Lenovo’s strong recent growth, including a sharp rise in AI-related revenue, as it expands AI infrastructure, software, and services for business users.

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