China's October exports seen up 33.5% as AI hardware race fuels the boom

China's exports likely grew 33.5% in October from a year earlier in dollar terms, according to a Reuters poll, a slight cool-off from September's 36.3% surge but still a hefty number. Imports are seen climbing 32%, after September's 31.0% gain. The customs data lands Tuesday.

The poll's median forecast puts October's trade surplus at $125.8 billion, down from $133.53 billion in September. That still pushes the surplus past $1 trillion for the first 10 months of the year — a pile that risks rubbing trading partners the wrong way. EU leaders have been pushing for tougher measures to rebalance the bloc's trade with China, and relations with Washington stay tense. Brussels and Beijing agreed last month to cap Chinese hybrid vehicle exports to the EU over the next few years, but the curb isn't live yet, so exporters are expected to front-load shipments and pump up near-term numbers.

The engine behind the boom is the global scramble to build out AI infrastructure, which has inflated the value of what China ships abroad. That flow is keeping the economy on track for Beijing's 4.5-5% annual GDP growth target, even as households stay cautious. Retail sales rose just 1.1% in September, weighed down by falling property values, shaky job security and gloomy sentiment. An official factory survey also showed conditions worsening in October, with new orders and new export orders both contracting.

That contraction has ANZ analysts flagging the softness in new export orders as a possible early warning of a cooler AI tech cycle. Others aren't buying it. Xu Tianchen, senior economist at the Economist Intelligence Unit, said key hardware like printed circuit boards, memory chips and optical transceivers are still short on capacity — and that should keep export momentum solid through the rest of the year.