China’s export growth surged in October, reaching its highest pace since July 2022, with exports up 12.7% year-over-year to $309 billion. This strong performance, driven by holiday shipments and trade surplus gains, faces potential risks from Donald Trump’s reelection and renewed tariff threats.

Zhang Zhiwei, president of Pinpoint Asset Management, noted that exporters may be shipping goods early to reduce the impact of a potential trade war next year. He expects China’s economy to improve slightly in the fourth quarter but warns that exports alone can’t sustain growth.

Strong export growth, recorded in nearly 12 months, has helped offset weak domestic demand. However, this surge in low-cost exports has led to increased tariffs from the US, South America, and Europe on items like steel and electric vehicles.

China lowered its daily currency reference rate to its weakest in almost a year, signalling its central bank is allowing depreciation amid rising trade war risks with the US. A weaker currency makes Chinese exports more competitive.

October’s export growth was boosted by a weak base from the previous year, with exports rising despite a typical October slowdown. Exports to the US grew 8.1%, and shipments to markets like ASEAN, the EU, South Africa, Brazil, and Russia saw strong increases.

Trump’s return to the White House could complicate trade, with threats of up to 60% tariffs on Chinese goods, potentially damaging trade between the US and China.

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