Integration among ASEAN, China, Japan, South Korea boosted by AI boom

Beijing, China - In the first ten months, China's trade surplus surpassed the US$1 trillion mark, reaching US$1.04 trillion. This surge was largely driven by a global race to build artificial intelligence (AI) infrastructure, which boosted sales of high-tech products and offset weak domestic demand, potentially increasing tensions with major trading partners.

China's exports grew by 35.2% in October compared to the same period last year, only slightly behind the 36.3% increase in September, exceeding economists' forecasts for a 33.5% rise. This surge in exports contributed to the country's trade surplus reaching the milestone of US$1 trillion for the second consecutive year, a month earlier than in 2025.

While the global AI investment boom is expected to keep demand for Chinese technology products strong until 2027, it may deepen domestic imbalances and spark trade frictions with partners, including the European Union. The EU has called for stricter trade curbs on China following an agreement to limit Chinese exports of hybrid vehicles to the bloc.

China extended a trade truce with Washington for two months beyond its expiration on November 10, but officials said that increasing purchases of American farm goods would depend on reciprocal tariff reductions. The Asia-Pacific Economic Cooperation summit will convene next week in Shenzhen, where President Xi Jinping and U.S. President Donald Trump are set to meet for the third time in 2026.

Beijing's concerns are heightened by consumers' reluctance to spend due to a property market downturn that has eroded household wealth and dampened confidence in the economic outlook. Despite domestic vehicle sales declining for the 12th consecutive month, China's car exports continued to grow in October. Analysts forecast China's exports to accelerate further in the fourth quarter, before slowing down from the first quarter of 2027, dependent on the duration of the AI boom.