UOB’s Ho Woei Chen highlights that strong external demand, particularly in technology and AI-related products, is underpinning China’s growth in 2026. Export and import growth have remained robust, widening the trade surplus. Despite softer domestic conditions, recent fiscal and monetary measures are expected to stabilise activity, with overall 2026 GDP growth likely at the lower end of the official 4.5-5.0% target range.
External demand offsets domestic softness
"China’s external trade remained robust in Sep. Global AI-related capex growth and higher prices continue to support strong two-way trade in technology products. Export growth accelerated to 36.3% y/y (Bloomberg est.: 25.7%; Aug: 25.0%) and imports rose 31.0% y/y (Bloomberg est.: 25.0%; Aug: 28.2%)."
"China's external trade remained a key growth driver, with exports and imports rising 21.3% and 27.5% in 9M26, respectively. The cumulative trade surplus widened to US$938.11 bn, up from US$870.37 bn during the same period last year. Given the robust trade data to-date and technology-related demand, we raise our 2026 forecasts for export growth to 23% (from 17.0%) and import growth to 26% (from 22.0%)."
"Trade with the US has improved since the voiding of US tariffs imposed under President Trump’s International Emergency Economic Powers Act (IEEPA) as well as the stabilisation of US-China trade relations since the May summit between President Trump and President Xi. The latest meeting in Sep renewed commitments from both countries to preserving stable bilateral relations. Both exports and imports with the US remained at double-digit growth pace in Sep."
"While the AI-driven export boom has sustained external sector momentum through Sep, softer domestic conditions continued to weigh on China’s growth outlook. The recent step up in fiscal and monetary measures are expected to stabilise economic conditions with 2026 growth likely at the lower end of the 4.5-5.0% official target range."
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