China’s Exports Contracted Unexpectedly for First Time in 8 Months

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Nov 8, 2025 - 11:00 Updated: Nov 8, 2025 - 02:08
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China’s Exports Contracted Unexpectedly for First Time in 8 Months

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China’s exports fell in October, according to customs data, adding further strain to the world’s second-largest economy that is already grappling with sluggish domestic demand.

Overall sales abroad decreased by 1.1 percent last month from a year earlier, according to data released by the Chinese regime’s General Administration of Customs on Nov. 7. The figure fell short of a 3 percent growth forecast by economists in a Reuters poll and partially reversed the gain of 8.3 percent in September, representing the worst performance since February, when exports took a hit amid the Chinese New Year holiday.

While U.S. tariffs remained a drag on China’s trade, the latest slowdown was led by shipments to other markets, suggesting that the recent trade-weighted appreciation of the Chinese currency—the yuan or renminbi—may be impacting China’s export competitiveness, said Capital Economics’ Zichun Huang and Julian Evans-Pritchard.

“A partial rollback of US tariffs as part of the recent trade ‘deal’ may offer some support to exports. But any gains are likely to be limited, not least because easing US–China tensions appear to be adding to the tailwinds behind renminbi appreciation,” the economists wrote in a note on Nov. 7.
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Starting from Nov. 10, the United States will halve fentanyl-related tariffs on China to 10 percent, as part of a one-year truce finalized last month, following the summit between U.S. President Donald Trump and Chinese leader Xi Jinping in South Korea.

With the tentative U.S.–China trade truce, Woei Chen Ho, an economist at United Overseas Bank in Singapore, expects China’s trade outlook to stabilize in the near term.

“However, ongoing supply-chain reconfiguration is set to continue while both countries will also seek to reduce their interdependence,” she said in a note, adding that the U.S.–China trade share may decline further over time.”

Exports to Non-US Markets Slow

Exports to the United States fell by 25.2 percent year over year, the seventh month of double-digit decline.

Unlike previous months, the slump was not offset by demand from other markets, such as the European Union and Africa.

Exports to the Association of Southeast Asian Nations (ASEAN), China’s top trading partner, increased by 11 percent last month from the year before, compared to a 15.6 percent year-over-year growth in September.

Shipments to the European Union, China’s second-largest trading partners, grew by 0.9 percent on year, down from September’s 14.2 percent gain.

Exports to South Africa also slowed sharply, rising by 10.5 percent in October, following a 56.4 percent increase in September.

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Weak Demand at Home

China’s customs data showed imports rose by 1 percent year over year in October, down from September’s 7.4 percent growth and missing economists’ forecasts.

As a result, China’s trade surplus stood at $964 billion in the first 10 months of the year, a 22.9 percent increase from the same period last year. If the current trend continues, China’s trade surplus is poised to set a new record by the end of the year.

Analysts say the unexpected trade slowdown puts additional pressure on Beijing to stimulate domestic demand in the remaining months of this year.

“With intensifying growth headwinds from a slew of demand shocks, especially on retail sales and exports, we believe Beijing’s policy focus might once again shift to ensuring short-term stability,” analysts at Japanese bank Nomura said in a note.

Chinese officials said last month that they plan to significantly raise the share of household consumption in economic growth over the next five years, following a key conclave of the Chinese Communist Party’s governing Central Committee that mapped out economic and policy goals for 2026–2030.

Officials’ commitment has met with skepticism from economists. Kenneth Rogoff, a professor of international economics at Harvard University, described the goal of building a robust domestic market as “very challenging,” citing the persistent slump in the housing market, which he said accounts for approximately 80 percent of the average Chinese family’s wealth.

Adding to the difficulties is the lack of a comprehensive pension and health care system in the communist country, according to Rogoff, who served as the International Monetary Fund’s chief economist from 2001 to 2003.

As families have to save for their health care, “it’s very hard to get people to build consumption,” he said in a recent interview with The Epoch Times.

Rogoff predicted China’s economic growth will likely slow further, possibly by 2 to 3 percent. Still, he doesn’t anticipate official statistics from the Chinese regime to show the complete picture of the country’s economy.

“It’s not going to grow at 5 or 6 percent,” he said of China’s economy. “The official numbers may show that, but I think true accounting would have China’s growth slowing down.”

Reuters contributed to this report.
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