China’s trade numbers for October show a mixed bag with exports and imports moving in opposite directions. Increases were particularly pronounced for rare earth shipments, which increased 8.6% from the month of September, to a total of 4,343 tons. Net-net, exports overall shrank on a year-over-year basis for the first time since February, down a sharp 1.1% year-over-year in USD terms. Furthermore, trade tensions with the United States are on the rise. Consequently, exports to the US fell by 25.2% YoY.
Together with the rising Chinese trade surplus, another sign of the pinched trade environment China is facing. That’s a decline from $90.45 billion in September down to $90.07 billion in October. Imports grew modestly at 1.0% in USD terms and 1.4% in CNY terms. That increase was below the market expectations of 2.7% growth.
China’s exports to these markets in October was a very encouraging picture. Exports to Vietnam were up 22.4% and Hong Kong and Singapore saw increases of 20.9% and 16.8%, respectively. On top of that, exports to South Africa were up 14.3%.
Even with this encouraging news from some states, the national export drop signals serious trouble. Exports to the US have shrunk for seven consecutive months through April. This further dip has led to an impressive year-to-date plunge of 17.8%.
“Exports to the US contracted by double-digit pace for the 7th consecutive month since April. The decline narrowed slightly to -25.2% year-over-year in October from -27.0% in September,” – [Source not specified]
According to the report, some sectors are still doing better than others—especially when it comes to high-tech goods. “By key products, the strongest export growth was seen in ships, rare earths, motor vehicles, semiconductors and LCD panels which grew at a double-digit pace in October,” stated an industry source. Consumer discretionary goods, such as toys and footwear are experiencing a record slump in demand. This dramatic decrease can be attributed to the effects of US tariffs.
China’s imports grew modestly despite lower expectations. So in USD terms, the increase year-over-year is a mere 1.0%. That’s a significant decrease from September’s 7.4% rate.
“Total exports unexpectedly fell -1.1% year-over-year in USD-terms… Imports grew 1.0% year-over-year,” – [Source not specified]
A number of factors led to the mixed results. This year, a warping of the calendar – with one more holiday in October compared to last year – and worsening China-US trade tensions injected additional uncertainty.
“The slowdown in October trade was partly due to an additional day of holiday in October this year compared to 2024 while intensified trade tensions with the US added to the uncertainties,” – UOB Group’s Economist Ho Woei Chen
Through showcasing both resilience and vulnerability, China’s trade dynamics provide a lens for understanding how the nation is charting a course through a stormy global environment. This increase in rarer earth exports marks a significant strategic pivot during crucial geopolitical hostilities. At the same time, the broad drop in exports has implications for whether that overall growth is sustainable in the coming months.