China Exports Rise 35% as Central Bank Adjusts Reserves

China reported a 35.2% year-on-year increase in exports for October, reaching $412.3 billion. This growth was supported by strong global demand for AI hardware, with Chinese chip exports doubling in value. Imports grew at a faster rate of 41.6% to $307 billion, influenced in part by higher oil prices linked to conflict in the Middle East.

Because imports grew more quickly than exports, the monthly trade surplus narrowed to $105.3 billion, down from $133.5 billion in September. Despite this monthly dip, the total trade surplus for the first 10 months of the year exceeded $1.04 trillion. Export growth remained resilient even as the yuan gained approximately 5% against the U.S. dollar this year.

To manage foreign-exchange liquidity and potentially curb the currency's appreciation, the People's Bank of China announced a policy shift. The central bank will increase the reserve requirement on foreign-exchange deposits from 4% to 6%, a measure that becomes effective November 15.