China's foreign trade has so far avoided a serious impact from the Sino-US trade dispute thanks to the sustained recovery of the world economy and the steady growth of global merchandise trade much of this year. While a truce has been called in the dispute，there is no longer term resolution. For the time being，the economy has generally maintained strong growth momentum. The pattern of trade is being optimized，and gains have been made in industrial restructuring. Nevertheless，there are near-term and long-term challenges that need to be addressed. China is facing possible adverse effects from a global economic downturn and its likely impact on trade. It is reasonable to prepare for a setback to global trade. In the longer term there will be adjustments in global trade. China should strive to boost investment and embrace advanced technology that meets the demands of the digital economy. The following essay takes a close look at these challenges and how China should respond.

China's foreign trade saw unexpected growth in October. Exports reached 1,490.71 billion yuan，up 17.8%，and imports were 1,257.09 billion yuan，up 20.3%. Nearly 70% of the increase in gross import and export values reflected expanded volumes. Although import growth slowed slightly compared with the 22.3% year on year rise  in September，it reached a record high for the year in value terms. Exports had an even bettFer performance，with growth reaching a four-year high.

The trade increase topped expectations as a result of several factors. External demand was buoyed by the strength of the global economy，a weaker renminbi against the dollar，and the use of export rebates. Exporters may have also tried to speed up shipments to avoid punitive tariffs.

While imports and exports have risen，the trade surplus has narrowed. The surplus was 233.63 billion yuan in October 2018. Although it has continued to rise since August，it was down 5.1% year on year. The trade surplus from January to October of this year stood at 1,658.8 billion yuan，down 26%. The surplus in October in dollar terms was US$34.02 billion，down 7.8%，and the cumulative surplus was US$254.2 billion，a 22.3% decline.