China's trillion-dollar surplus: Asia's AI trade

<p><em>Special Reporting from LSN News, adapted from today's Asia Money Map episode. <a href="https://youtu.be/zgv-Pi2BCtY" target="_blank" rel="noopener">Watch the video on YouTube.</a></em></p>

<p>China's trade surplus has passed one trillion dollars for the second year running, and it got there a month earlier than last year. Customs data released on Tuesday shows how an artificial intelligence boom is powering that surplus, which Asian economies are feeding it, and why China's trading partners are preparing to push back.</p>

<h2>A record pace, driven by AI</h2>

<p>China's customs administration said exports rose 35.2 percent in October from a year earlier, in US dollar terms. That beat the 33.5 percent forecast in a Reuters poll. Imports grew 41.6 percent, against a forecast of 32 percent. CNBC reports that is the strongest import growth since May 2021.</p>

<p>The trade surplus for the first ten months reached US$1.04 trillion. Reuters, in a report carried by CNA, says the milestone arrived a month earlier than in 2025. CNBC notes that last year's full-year surplus was a record US$1.2 trillion.</p>

<p>The driver is artificial intelligence. Reuters says the global race to build AI infrastructure has lifted sales of high-tech products, helping offset weak demand at home. Sharecast, summarising the customs breakdown, says exports of semiconductors jumped 137.1 percent.</p>

<h2>Where the money lands in Asia</h2>

<p>The import side is where Asia comes in. Tianchen Xu, a senior economist at the Economist Intelligence Unit, told CNBC that imports were still dominated by the AI trade. Customs figures for January to October show where the money lands. Imports from South Korea were up 79.1 percent, to about US$271 billion. Imports from Taiwan rose 29.2 percent, to about US$244 billion.</p>

<p>Southeast Asia sits on the other side of the ledger. Over the same ten months, China's exports to the ten ASEAN countries came to about US$706 billion, up 30.5 percent. Exports to Vietnam rose 32.1 percent, to Thailand 38.2 percent, and to Malaysia 42.4 percent. By comparison, exports to the United States rose 12.1 percent, and to the European Union 17.2 percent. In dollar terms, ASEAN bought more Chinese goods than either the European Union or the United States.</p>

<p>Asian investors cheered. Sharecast reports that on Tuesday, Seoul's Kospi rose 4.4 percent, Tokyo's Nikkei 2.9 percent, and Taiwan's Taiex 2.5 percent, as chip shares rebounded from last week's sell-off.</p>

<h2>Warnings, politics and a hot US inflation print</h2>

<p>Nguyen Hoang Nam, China economist at Capital Economics, said, "Momentum looks to have slowed," according to CNBC, estimating a 2 percent monthly fall in exports after seasonal adjustment. Macquarie analysts wrote that "The outlook for exports depends on how long the AI boom will last."</p>

<p>The politics are also tightening. Washington and Beijing have extended their trade truce by two months, to January, and CNBC reports that Xi Jinping and Donald Trump are expected to meet at the APEC summit in Shenzhen next week. In Europe, a cap on Chinese hybrid car imports takes effect on 1 December. China's shipments to the European Union grew 24.4 percent in October, and its surplus with the bloc widened to US$33.4 billion. Joe Peissel of Trivium China said, "The risk of additional tariffs and other trade barriers will remain elevated in 2027, particularly as Chinese manufacturers continue expanding their presence in overseas markets."</p>

<p>Another risk is arriving from outside Asia. Reuters reports that US consumer prices rose 0.4 percent in October, above the 0.3 percent forecast, and that traders raised their bets on a half-point Federal Reserve rate hike in December. Wall Street fell, and the Nasdaq lost 0.7 percent. Asian markets now open Wednesday facing higher US yields and a stronger dollar.</p>

<p><strong>The verdict:</strong> In our analysis, China's trillion-dollar surplus is not a sign of strength at home. Retail sales grew only 1.1 percent in September, according to CNBC, while factories run on overseas demand for AI hardware. This is a cycle trade, not a rebalancing. South Korea and Taiwan sell the chips, Southeast Asia absorbs the goods, and all of it rides on AI spending that wobbled only last week.</p>

<p>Three things to watch: the Xi and Trump meeting in Shenzhen, whether Europe follows its car cap with wider curbs, and whether the Fed's tightening hits the chip trade carrying the whole region. The surplus is the headline, but the AI cycle is the risk.</p>

<h2>Sources</h2>

<ul>

<li><a href="https://english.customs.gov.cn/Statics/398df605-351d-4d3e-8b55-c7caac29b9b0.html" target="_blank" rel="noopener">General Administration of Customs of China (by trade mode)</a></li>

<li><a href="http://english.customs.gov.cn/Statics/6b12ff5d-745a-41ad-b780-3886bc9d53e9.html" target="_blank" rel="noopener">General Administration of Customs of China (by country/region)</a></li>

<li><a href="https://www.investing.com/news/economy-news/chinas-trade-surplus-soars-past-1-trillion-october-exports-jump-352-yy-5013969" target="_blank" rel="noopener">Reuters (via Investing.com)</a></li>

<li><a href="https://www.channelnewsasia.com/east-asia/china-trade-surplus-1-trillion-ai-boom-exports-6537981" target="_blank" rel="noopener">CNA (Reuters)</a></li>

<li><a href="https://www.cnbc.com/2026/11/10/china-trade-october-exports-imports-surplus-.html" target="_blank" rel="noopener">CNBC</a></li>

<li><a href="https://www.sharecast.com/news/market-report-asia/asian-stock-markets-nikkei-225-kospi-softbank-samsung-electronics-sk-hynix-tsmc-hang-seng--24106012.html" target="_blank" rel="noopener">Sharecast</a></li>

<li><a href="https://apnews.com/article/china-trade-economy-trump-surplus-0fc56d7bd8bbff86ce6672bb67691f22" target="_blank" rel="noopener">AP</a></li>

<li><a href="https://www.streetinsider.com/Reuters/Asian+stocks+climb+as+oil+prices+slide+ahead+US+CPI/27316942.html" target="_blank" rel="noopener">Reuters (via StreetInsider)</a></li>

</ul>