A cargo ship loaded with foreign trade containers heads toward Qingdao Port in Qingdao city, Shandong province, China, Nov. 5, 2025.
Costofoto | Nurfoto | fake images
In October, China’s exports declined for the first time in nearly two years due to a high base effect as companies’ momentum to anticipate their exports slowed ahead of a meeting between the leaders of the United States and China.
Exports fell 1.1% in October in US dollar terms from a year earlier, their first contraction since March 2024, when exports contracted a staggering 7.5%.
The drop in exports was unexpected as economists had anticipated 3% growth, according to a Reuters poll, compared with a six-month high of 8.3% growth in September.
Imports rose 1% last month, missing estimates for 3.2% growth, as a prolonged housing market slowdown and weak labor market conditions continued to weigh on consumer demand. They had risen 7.4% in September.
“It looks like the frontloading finally faded in October,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, expecting China’s exports to normalize as trade restrictions are lifted for a year.
Chinese exporters and American buyers breathed a sigh of relief last week after US President Donald Trump and his Chinese counterpart Xi Jinping reached a deal during their meeting in South Korea, easing a situation that had threatened to plunge bilateral relations into a full-blown trade war.
China’s exports to the United States fell 25% in October from the same month a year earlier, marking the seventh consecutive month of double-digit declines, according to customs data. Imports decreased almost 23% last month.
The two countries agreed to roll back a series of punitive measures, including high tariffs, export controls on critical minerals and advanced technology, while Beijing pledged to buy more American soybeans and work with Washington to crack down on fentanyl flows.
Following the trade truce, the effective US tariff rate on Chinese exports fell to 31%, according to Macquarie Group estimates.
Last month’s sharp slowdown was partly due to the elevated base in October 2024, when exports grew at their fastest pace in more than two years.
During the first 10 months of this year, Chinese shipments to the United States decreased 17.8%, while incoming goods fell 12.6%, reducing the trade surplus by 20% from a year earlier to $233 billion.
Despite the drop in goods bound for the United States, China’s overall exports grew 5.3% this year through October, as Chinese exporters sought alternative markets or diverted goods indirectly to the world’s largest economy.
Exports to the Association of Southeast Asian Nations, the European Union and Africa increased by 14.3%, 7.5% and 26.1%, respectively, in the first 10 months.
China has accumulated a trade surplus of more than $964.8 billion in the first 10 months of this year, 23% more than during the same period in 2024.
Oxford Economics raised its forecast that Chinese exports will grow by 3.5% to 5% annually in real terms, according to a report on Thursday, driven by Beijing’s push to deepen industrialization in its next five-year development plan and efforts by Chinese exporters to diversify into regional and emerging markets.
The research firm upgraded its forecast for China’s real GDP growth to 4.5% by 2026 and 4.4% by 2027.
“Now that export momentum is weakening, China needs to rely more on domestic demand,” Zhang added, anticipating that policymakers will implement more supportive fiscal measures in the first quarter of next year.
Echoing that sentiment, Larry Hu, chief China economist at Macquarie Group, said Beijing would turn to boosting domestic demand as the main growth driver to reach the annual GDP target “sometime between 2026 and 2030.”
Beijing is likely to maintain the growth target of “around 5%” in 2026 and calibrate stimulus so as not to miss or overshoot that target.
Falling prices and fierce price competition have led Beijing to step up efforts to curb industrial overcapacity in recent months. The profits of the main industrial companies increased by 3.2% in the first nine months.
Economic data for October suggested that manufacturing activity had contracted for seven consecutive months, as trade tensions with Washington reignited.
