China’s Exports Dip 1.1% in October as US Shipments Plunge 25%
In a report released on Friday, the government revealed that China’s exports experienced a contraction in October, primarily due to a significant 25 per cent decline in shipments to the United States. Trade tensions with Washington may see a reprieve in the final quarter of the year following an agreement between President Donald Trump and Chinese leader Xi Jinping last week to de-escalate the trade war between the two largest economies. However, trade friction continues to loom over demand in other areas. Customs data reveal a 1.1 per cent decline in China’s global exports for October compared to the same month last year, marking the weakest performance since February, after an 8.3 per cent rise in September. Imports increased by 1 per cent last month compared to the same period last year, a notable decline from the 7.4 per cent growth observed in September.
China’s shipments to the US have experienced a decline of double digits for seven consecutive months, while the country has expanded its export markets to regions including Southeast Asia and Africa. The decline in October was also influenced by a high base from the same month in 2024, when export growth surged by more than 12.6 percent, marking the fastest rate in over two years. Imports increased by 1 per cent last month, in contrast to a 7.4 per cent growth recorded in September year-on-year. Experts indicated that a sustained decline in the property sector and sluggish domestic consumption continue to be a matter of concern. During their meeting in South Korea in late October, Trump and Xi reached an agreement to lower tariffs and delay the new port fees they had enacted on each other’s vessels.
China has temporarily halted certain export controls on rare earths for a duration of one year and has committed to increasing its purchases of soybeans and other agricultural products from the United States. The United States has relaxed certain sanctions imposed on Chinese companies. Goldman Sachs economists stated after the Trump-Xi meeting that they anticipate Chinese export volumes to increase by 5 per cent to 6 per cent each year, which will assist China in gaining global market share and propelling its overall economic growth. Leah Fahy and Zichun Huang noted in a recent report that “the reduction in some of these tariffs as part of the latest US-China trade deal may provide a small boost to exports.” However, they indicated that this will not become apparent until the later part of the last quarter of this year.
“A meaningful US export boost would probably start in the first quarter of next year and then accelerate in the second quarter,” said Wei Li. This week, Chinese Premier Li Qiang addressed business leaders at the annual China International Import Expo in Shanghai, stating that China would embrace free markets and free trade. He also criticized trade restrictions that negatively impact developing countries, reaffirming Beijing’s commitment to maintaining global trade stability amid ongoing economic challenges and geopolitical uncertainty.
