China’s trade surplus surpassed the $1 trillion mark for the second consecutive year during the first ten months of 2024, driven largely by a surge in global demand for artificial‑intelligence (AI) technology and semiconductors. The rise comes as domestic consumption remains weak and the real‑estate sector continues to struggle. According to customs data released on Tuesday, China’s exports grew 35.2 % year‑on‑year in October, exceeding economists’ forecast of 33.5 % but falling slightly short of September’s 36.3 % gain. The strong export performance lifted the cumulative trade surplus to $1.04 trillion, surpassing the $1 trillion threshold a month earlier than it did last year. Analysts say the figures underscore Beijing’s growing reliance on external markets to offset domestic demand shortfalls, raising concerns that trading partners may adopt more protectionist policies. The AI infrastructure boom has been a key driver. Semiconductor exports jumped 111.1 % in value over the first ten months of the year compared with the same period a year earlier, while high‑tech exports overall rose 47.9 %. “Trade growth may slow next year because of a higher base, but AI‑related demand is expected to remain strong in the coming months,” said Lin Sung, senior economist for the Greater China region at ING. Analysts predict that the technology‑investment surge could support Chinese exports through 2027, but warn that a slowdown in global AI spending could expose the sector to risks. Trade tensions with Washington and Brussels are intensifying as the surplus widens ahead of the Asia‑Pacific Economic Cooperation (APEC) forum in Shenzhen next week. China’s trade surplus with the United States fell to $32.71 billion in October from $34.01 billion in September, a decline that still fuels friction between the two economies. On Monday, China and the United States extended a trade truce for an additional two months, linking the expansion of U.S. agricultural imports to the implementation of agreed tariff cuts. In Europe, the European Union and China reached an agreement to limit Chinese hybrid‑car exports over the coming years. The delay in applying these restrictions may prompt Chinese firms to accelerate shipments before the measures take effect, providing a short‑term boost to exports. Joe Bisel, macroeconomist at Trivium China, cautioned that the risk of new tariffs and trade barriers could rise in 2027 as Chinese companies expand abroad. Imports also accelerated, rising 41.6 % in October—well above Reuters’ 32 % forecast and up from 31 % in September. Rare‑earth exports edged higher compared with the previous month, suggesting a possible easing of export controls. Nguien Huang Nam, economist at Capital Economics, noted that the decline in export volumes could signal a relaxation of restrictions in response to U.S. pressure to improve supply chains. Oil‑crude imports hit their highest level since March, as buyers adjust to supply disruptions in the Middle East. The data had little impact on financial markets; the CSI 300 and Shanghai Composite indices each rose 0.1 % by mid‑session. Despite the export‑led support, China’s domestic economy faces persistent challenges. The real‑estate slump continues to erode household wealth and confidence, while the automotive sector’s domestic sales have fallen for the second consecutive month. Export‑driven growth contrasts sharply with the weak domestic consumption that threatens the sustainability of overall economic expansion. Beijing now faces a delicate balance: harness the AI boom to sustain growth, reduce dependence on external demand, and stimulate domestic consumption to avoid turning export success into a new source of trade friction.