China’s exports contracted for the first time since February, while imports slowed more than expected in October. The slowdown in trade was partly attributed to an additional day of holiday in October this year compared to 2023, as well as intensifying trade tensions with the United States. This information comes from UOB Group’s economist, Ho Woei Chen.
**Trade Performance in October**
Total exports unexpectedly fell by 1.1% year-on-year (y/y) in USD terms, contrary to Bloomberg’s estimate of 2.9% growth and September’s 8.3% increase. In CNY terms, exports were down 0.8% y/y compared to a 8.4% gain in September. Imports grew by 1.0% y/y in USD terms (Bloomberg estimate: 2.7%, September: 7.4%) and by 1.4% y/y in CNY terms (September: 7.5%). As a result, China’s trade surplus narrowed slightly to US$90.07 billion, down from US$90.45 billion in September.
**Export Destinations and Trends**
Exports to the United States declined at a double-digit rate for the seventh consecutive month since April. The decrease narrowed slightly to -25.2% y/y in October from -27.0% y/y in September, bringing the year-to-date contraction to -17.8% y/y. On the other hand, export growth was robust in markets such as Vietnam (+22.4%), Hong Kong (+20.9%), Singapore (+16.8%), and South Africa (+14.3%). Overall, ASEAN remained China’s largest export market, accounting for a 17.5% share of total exports. Exports to the European Union moderated, with growth slowing to 0.9% y/y from 14.2% y/y in September.
**Key Export Products**
In terms of products, the strongest export growth was recorded in ships, rare earths, motor vehicles, semiconductors, and LCD panels, all of which posted double-digit growth in October. Conversely, exports of consumer goods such as toys, footwear, handbags, and garments continued to decline. This trend likely reflects a shift in demand to overseas production, driven by US tariffs. Notably, China increased its rare earth exports in October amid ongoing tensions with the US. Rare earth shipments rose by 8.6% compared to September, reaching 4,343 tons in October after noticeable declines in the preceding three months.
**Outlook**
While trade remains affected by global economic conditions and international tensions, there are expectations that the outlook could stabilize amid potential trade truces and market adjustments. Continued monitoring will be essential to gauge future trends in China’s trade dynamics.
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