Chinese exports in September exceeded expectations, with imports rising at the fastest pace since April 2024

Chinese exports rose at the fastest pace in six months in September, while imports registered the strongest increase in more than a year, even as a trade deal with the US remains elusive.

Exports grew 8.3% in US dollar terms in September from a year earlier, Chinese customs data showed on Monday. That surpassed economists polled by Reuters' rise of 7.1% and recovered from its low in August.

Imports rose 7.4% last month from a year ago, sharply surpassing Reuters estimates for 1.5% growth, marking the strongest level since April 2024, according to LSEG data.

Chinese exports to the US fell 27% in September, while imports fell 16% from a year earlier. Beijing's imports from the US have fallen by double digits every month since April.

Beijing's trade surplus with the US narrowed to $208.6 billion in the first nine months, according to official data, from $25.8 billion in the same period last year.

Double-digit declines in shipments to the US were largely offset by sharp increases in exports to other markets. Exports to the Association of Southeast Asian Nations, the European Union and Africa increased by 15.6%, 10.4% and 56.4% respectively.

Tensions between Beijing and Washington have flared again in recent days as both sides traded barbs and stepped up respective restrictions, threatening to erode progress made after several rounds of bilateral trade talks this year.

US President Donald Trump has threatened an additional 100% tariff on Chinese exports and stricter export controls on critical software. Beijing, meanwhile, expanded restrictions on rare earth exports – although some won't come into effect until November – and expanded its blacklist of “unreliable entities” to include chip consultancy TechInsights. Authorities have also opened a new antitrust investigation into the American semiconductor manufacturer Qualcomm.

The additional tariff on U.S. imports from China, if stacked at the current average rate of about 55%, could push total duties above 150%, effectively triggering a trade embargo, said Gabriel Wildau, managing director of political risk consultant Teneo.

“China would likely respond tit-for-tat, and bilateral trade would slow to a trickle,” Wildau added.

Both sides have threatened to impose fees on each other's ships for docking in their own ports. These will come into effect the same day on October 14. China's tariffs will start at 400 yuan ($56) per tonne, matching those imposed by Washington.

According to the Center for Strategic and International Studies, the US represents just 0.1% of global shipbuilding, compared to 53.3% for China.

Chinese Customs spokesman Lyu Daliang said at a news conference on Monday that Beijing hopes the US will realize it is taking the wrong approach by raising port fees, and urged Washington to return to dialogue and negotiation.

Lyu added that new tariffs imposed by several countries this year have hurt businesses and disrupted the global economy, saying China remains committed to supporting multilateral trade.

The reluctance of China – the world's largest importer of soybeans – to resume purchasing US crops further dimmed hopes for a trade deal.

Trump said earlier this month that he hoped to pressure the Chinese president during their planned meeting in late October to end the months-long moratorium on U.S. soybean purchases.

China's imports of soybeans rose 13% in September from a year earlier, according to official data, although details on the origins of these crops were not immediately available.

Chinese rare earth exports fell 30% from the previous month to 4,000 tonnes in September. Earlier this month, Beijing tightened its grip on the critical minerals, adding five new items to its checklist and increasing scrutiny of foreign companies seeking access to the materials.

If fully enforced, the rules could have a major impact by requiring global chip companies such as Nvidia, TSMC and Intel to obtain licenses from Chinese regulators to sell chips anywhere in the world, Wildau said.

The focus now is on a meeting between Xi and Trump at the end of the month, where the two sides can reverse the escalation, said Allan von Mehren, Chinese economist at Danske Bank, who puts the chance of such an outcome at more than 50%.

China's Commerce Ministry said earlier Sunday that the US should scale back its tariff threats and urged further talks to resolve outstanding trade issues.

“Threatening high tariffs is not the right way to deal with China,” the Commerce Department said. “If the US continues to follow its own course, China will resolutely take corresponding measures to safeguard its legitimate rights and interests.”

Customs Vice Minister Wang Jun said at Monday's press conference that stabilizing trade in the fourth quarter will be a challenge due to the complex external environment and last year's high base effect.

China will likely be forced to deepen ties with other markets, said Taimur Baig, chief economist at DBS Bank, potentially offering greater access to its trading partners. “Countries that want to work with China are likely to find a more favorable export environment in the coming years,” he added.

The unexpected rise in Chinese imports in September came after a year of weak demand caused by a prolonged housing recession, rising job insecurity and the phasing out of consumer stimulus measures.

Despite the improvement, other closely watched spending data continues to point to deflationary pressures in the broader economy.

Total domestic tourism travel during the eight-day holiday ending October 8 generated $113.6 billion in revenue, up 7.6% from last year but slowing from the 8% increase during another holiday in May. Average spending per trip was also about 3% lower than in 2019 before the pandemic, according to Goldman Sachs estimates.

Economists expect deflation in both the producer price index and consumer price index (due Wednesday) to continue in September, with the PPI falling 2.3% and the CPI falling 0.1% from a year earlier, according to LSEG data.

According to customs data, China's trade surplus stood at $90.5 billion last month, up from $81.7 billion in September last year.