AGP Executive Report

Trade Boom: China’s exports surged 36.3% in September and imports climbed 31%, producing a $133.5 billion monthly surplus and lifting the January–September total to $938 billion. High-tech goods, semiconductors and autos led shipments, while weak domestic demand leaves growth reliant on exports. Trade Tensions: Beijing and Washington agreed to shield some goods from tariffs and extend their trade truce, but the EU is pushing China to rebalance trade and weighing tougher measures. Economic Signals: Factory-gate prices hit a four-year high as consumer inflation remained subdued, pointing to rising input costs without a broad demand recovery. Industry Pressures: Five major Chinese solar makers cut more than 40,000 jobs in 2025 as overcapacity continued to fuel losses. Separately, Chinese chipmaker CXMT’s memory advances rattled global chip stocks and intensified competition in the sector.

Trade Surge: China’s exports jumped 36.3% year on year in September and imports rose 31%, lifting the monthly surplus to $133.5 billion. The year-to-date surplus reached $938 billion, putting a new annual record in sight. Prices and Credit: Consumer inflation edged up to 0.9%, below forecasts, while factory-gate prices rose 5%—their fastest pace in more than four years. New bank lending rebounded to 1.08 trillion yuan, but record-low loan growth points to still-soft demand. US Trade: Chinese state buyers purchased 8–10 cargoes of US soybeans, the first such deals since the Trump-Xi summit, as Beijing works toward a 25-million-tonne buying target. Payments: Visa won approval to prepare a domestic card-clearing business in China, a step toward entering the country’s tightly regulated payments market. Green Shipping: China completed the world’s first ship-to-ship green-ammonia bunkering in Zhoushan, transferring 1,000 tonnes to an ammonia-powered bulk carrier.

Payments: China has allowed Visa to prepare a domestic card-clearing business, a step toward entering the world’s largest payments market—but the company still needs a full operating license. Semiconductors: Chinese chipmaker CXMT’s reported progress in memory technology rattled global chip stocks, renewing concerns for Samsung, SK Hynix and Micron as China targets next-generation server products. Autos: China and the EU reached a vehicle-trade understanding to avert wider friction, with the bloc set to cap Chinese hybrid imports at 350,000 a year. China also plans to cut its EV export-tax rebate from April 2027; meanwhile, September passenger-car sales at home plunged 28% year on year as exports cushioned the downturn. Industrial technology: Shanghai aims to deploy 8,000 humanoid robots in factories by 2028 and build 500 advanced smart factories. Growth: The IMF lowered its China forecasts to 4.5% for 2026 and 4% for 2027, citing weak demand, property-sector strains and continued uncertainty.

Chip Competition: China’s CXMT plans to introduce denser 4F² DRAM chips by year-end, unsettling global memory makers. Samsung and SK Hynix shares fell sharply, while Chinese stocks closed mixed. Auto Trade: The EU and China agreed to cap Chinese-built hybrid imports at 350,000 a year, with the limit rising 6% annually. Chinese automakers are leaning harder on exports as domestic sales weaken, while Beijing plans to cut the NEV export tax rebate to 9% from April 2027. Payments Opening: Visa won approval to prepare a domestic card-clearing business in China, a step toward expanding its local payments presence. Robotics: UBTECH and property group C&D set a goal of selling at least 10,000 humanoid robots by 2030, targeting logistics, security and public services. Growth Outlook: The IMF lowered its China growth projection and urged Beijing to reduce reliance on exports by shifting toward stronger household consumption.

Auto Exports: China’s NEV exports jumped 130% to 4 million in the first nine months, even as September domestic vehicle sales slumped 26% year on year. The export surge is becoming a lifeline for automakers facing weaker home demand. EU Trade: Beijing and Brussels reached a consensus on vehicle trade, including a reported annual cap of 350,000 Chinese hybrid imports. The deal aims to ease tensions but could sharply curb shipments. AI Race: Chinese models took the top five spots in global weekly token usage, led by DeepSeek, whose usage rose 60% in the latest week. Tech Investment: SK Group plans an AI research center in Shanghai, targeting data centers, physical AI and biopharmaceuticals, according to South Korean media reports. Consumer Demand: China’s extended Double 11 shopping season is underway, with platforms rolling out early discounts and subsidies as retailers seek to sustain spending. Yuan Payments: Ecobank signed a deal with China’s CIPS network to facilitate yuan payments for African businesses, as China-Africa trade grows.

EU-China Trade: Brussels will cap Chinese hybrid-car imports at 350,000 a year under a deal with Beijing, aiming to curb shipments as exports surge. China says the arrangement allows volumes to grow from 2025 levels; lithium futures fell nearly 12% amid worries about weaker EV-battery demand. Autos: Chinese passenger-car exports jumped 64% year on year to 919,000 in September, while domestic sales slumped, underscoring automakers’ growing reliance on overseas markets. BYD is considering France for a European factory. Growth: The World Bank raised its 2026 China growth forecast to 4.5%, citing high-tech exports, as Beijing steps up fiscal support to boost demand. Policy and AI: China proposed new rules requiring platforms to formalize employment arrangements for many gig workers. Beijing is also promoting “token factories” to scale AI services into a new economic industry. Financial Risk: Police opened a criminal probe into CreditEase affiliates after the fintech group warned it may be insolvent and unable to repay investors in full.

Debt and Growth: China’s debt interest bill is consuming a rising share of public spending, reaching an estimated 19.2% this year, up from 12% in 2014. Beijing has pledged a more proactive fiscal policy to support domestic demand, while high-frequency indicators point to improving third-quarter momentum. Consumers and Tech: AI gadgets drew holiday shoppers, adding to signs that new technology is becoming a consumer draw. Trade: Beijing and Brussels reached a preliminary understanding that could curb Chinese hybrid-car exports and ease tariff pressure, but major trade disputes remain unresolved. Markets: China’s securities watchdog is seeking ways to attract long-term investors and encourage listed firms to pay higher dividends as stocks weaken. Critical Minerals: Chinese investment is driving Africa’s lithium expansion, with the continent’s share of global supply reaching 14% last year; local-processing demands and resource controls add uncertainty for investors.

EU-China Trade: Beijing and Brussels reached a preliminary understanding to curb projected Chinese hybrid-car exports to Europe by more than half over four years, while discussing better access to China’s market and smoother rare-earth licensing. Growth and Property: Beijing pledged a more proactive fiscal policy to support demand, as new-home sales in the capital reached 128,400 square meters in the first eight days of October, up 163% year on year. Exports: Taicang Port shipped 1.08 million vehicles in the first nine months, up more than 80% and its first time above the million mark. Digital Economy: China’s new development blueprint calls for a national blockchain network alongside expanded computing infrastructure. Gold: The central bank added 23 tonnes to reserves in September, its largest monthly purchase in about three years and the 23rd straight month of buying.

EU-China Trade: Beijing and Brussels said talks produced an understanding to manage trade disputes, including a plan that could cut Chinese hybrid-car exports to the EU by more than half, ease some EU tariffs and address rare-earth supply. China said dialogue could prevent further escalation. Growth Push: Beijing pledged more proactive fiscal policy to lift domestic demand, while local governments can tap 550 billion yuan in unused debt quotas. A separate 19-measure package aims to develop “new quality productive forces.” AI and Jobs: China plans new occupations and employment support as AI reshapes the workforce, alongside a push to build a national blockchain network. Energy and Autos: China issued 1.07 million tons in new low-sulfur fuel-oil export quotas, bringing the 2026 total above 14 million tons. GM’s China sales topped 358,000 in the third quarter, with new-energy vehicles exceeding 60% of sales.

China-EU Trade: Beijing and Brussels reached a 16-point consensus on trade and investment, including export controls and market access, and pledged to keep differences from escalating. A preliminary understanding could cut projected Chinese hybrid-car exports to Europe by more than half over four years, though the mechanism remains unclear. Jobs and AI: China announced an initiative to cushion AI’s impact on employment and create jobs through new technology, as demand for AI-skilled workers rises. Growth Support: Local governments can tap 550 billion yuan in unused debt quotas, adding fiscal firepower as Beijing seeks to support growth. Holiday Economy: AI gadgets drew shoppers during the National Day break, while Beijing’s new-to-market stores attracted visitors from other cities. Business Expansion: Zoomlion reported mining-machinery growth of more than 57% in the first half of 2026, with overseas operations accounting for over half its revenue.

China-EU Trade: Beijing and Brussels agreed to manage trade tensions, including an understanding on hybrid vehicles that EU trade chief Maroš Šefčovič said could cut Chinese exports by more than half. The sides also outlined 16 areas for cooperation and plan to meet again in March 2027. Fiscal Support: Beijing is freeing up 550 billion yuan in unused local-government debt quotas to help fund infrastructure and plug budget gaps, as it steps up support for growth. Consumer Demand: Golden Week drew record travel, but average spending per domestic trip fell 1.9% to a four-year low, underscoring the challenge of reviving household confidence. Industrial Policy: New national guidelines set out measures to accelerate innovation and develop “new quality productive forces” across technology and industry. Trade Tensions: China warned it would respond to measures targeting its exports under claims of overcapacity, as major economies coordinate on industrial capacity concerns.

Fiscal Stimulus: China will deploy 550 billion yuan in unused local-government debt quotas, including 300 billion to support county budgets and the rest for infrastructure, as weak consumption and investment threaten its 4.5%-5% growth target. Beijing also began selling special bonds to recapitalize major state financial institutions. Growth Outlook: UNCTAD forecasts China’s economy will expand 4.5% this year, while global growth slows to 2.6%; it warns trade between China and the U.S. has fallen more than 20% since 2024. Consumer Spending: National Day tourism brought in 738.4 billion yuan, up 4.3% year on year, but other indicators point to cautious spending, including falling hotel rates and a weak holiday box office. Trade Tensions: EU-China talks in Beijing are seeking to ease tensions, but Beijing rejected voluntary limits on hybrid-car exports as Europe weighs tougher trade measures.

Trade Tensions: EU trade chief Maroš Šefčovič opened talks in Beijing seeking to narrow the bloc’s €360 billion trade deficit. China rejected calls for voluntary limits on hybrid-car exports and denied weakening the yuan to boost trade, as European leaders weigh tougher measures. Consumer Economy: China recorded more than 2.1 billion trips over the National Day holiday, lifting tourism and retail activity, though reports point to cautious spending. September sales at the country’s top 100 property developers also rebounded as policy support took hold. Markets and AI: China’s exchanges are reshaping major indexes to give greater weight to AI and chip companies. Meanwhile, executives say firms are cutting management layers as AI changes hiring and workplace structures. Supply Chains: Amazon added two China-to-U.S. air-freight options, offering shipments from Shanghai, Hong Kong or Shenzhen with estimated delivery in seven to 15 days.

EU-China Trade: Trade chief Maroš Šefčovič arrived in Beijing for talks aimed at averting a trade war, as the EU weighs tougher measures over its widening deficit and China rejects requests to curb hybrid-car exports. Beijing warned that the sides’ supply chains are deeply interdependent. Regional Trade: Cambodia’s trade with RCEP members climbed 21.3% in the first nine months, with China among its top partners, while total foreign trade rose 22%. Holiday Economy: Beijing’s key business districts recorded 15.68 billion yuan in revenue, up visits 5.2% year on year; nationwide, travel surged but consumer spending remained cautious. Highway NEV charging volume jumped 51.4% over the holiday. Tech and Industry: China’s semiconductor sales rose 131% year on year in August amid a global market boom driven by AI demand. A Chinese cleanroom supplier also reported record first-half orders, pointing to continued investment in chipmaking. Energy: China’s October fuel-export halt threatens to tighten diesel supply across Asia.

EU-China Trade: EU trade chief Maroš Šefčovič is in Beijing seeking progress on a goods deficit exceeding €1 billion a day. Brussels is weighing tougher trade tools, while China warns against protectionism. Reserves: China added about 23 tonnes of gold in September, extending its buying streak to 23 months, even as foreign-exchange reserves fell $38.1 billion to $3.4 trillion. Autos: Chinese-made vehicles captured nearly 40% of Australia’s new-car market in September, outselling Japanese- and Thai-built vehicles combined. Consumer Economy: Golden Week drew huge travel demand, but reports point to cautious spending, underscoring the challenge of turning holiday activity into broader consumption growth. AI Chips: Huawei says its Ascend chips now outsell Nvidia’s in China, but the company says it still cannot meet domestic demand.

EU-China EV Showdown: EU negotiators head to Beijing for high-stakes talks on electric vehicles, market access and trade imbalances, with Brussels pushing for progress after countervailing duties and months of technical talks. UK Tariff Pressure: The UK Trade Remedies Authority proposes anti-dumping duties up to 82.9% on Chinese boom lifts, extending provisional measures for five years. Central Bank & FX: China’s forex reserves fell 1.11% in September to $3.4003tn, while the PBOC added gold for a 23rd straight month as bullion prices weakened. Auto Demand Signals: Mercedes-Benz Q3 car sales fell 8% overall, with China deliveries down 31%, while battery-electric sales rose 52%. AI Governance Split: A new report maps how the US, China and EU are regulating AI differently—US leaning on voluntary pledges, EU on binding rules, and China on its own governance push. Cross-border Business: Orange Business and Aviatrix expanded their Asia-Pacific partnership, with first-right-of-refusal opportunities in China and nearby markets. Tourism Micro-economy: Low-altitude tourism is emerging as a growth point in Anhui’s Hongcun Village, creating jobs around flights and ground services. Trade & Logistics: Noatum Logistics launched a dedicated fairs and events logistics line to serve exhibition markets with integrated planning and execution. Global Finance Watch: US trade deficit widened to $105.6bn in August as imports hit record highs, keeping global market sentiment sensitive.