Intensifying droughts under climatic warming are of widespread concern owing to their devastating impacts on water resources, societies and ecosystems. However, the effects of exogeneous drivers on regional droughts remain poorly understood. Using the Lagrangian method, atmospheric reanalysis data and climate projections from the Coupled Model Inter-comparison Project phase 6 (CMIP6), we show how exogenous precipitation minus evaporation (PME) deficit drives droughts across China. More specifically, we demonstrate that four distinct trajectories of such exogenous PME deficit fuel regional droughts. Three of these trajectories relate to oceanic PME deficit originating from the North Atlantic, eastern Bering Sea and Indian Ocean, and one trajectory characterizes exogenous terrestrial PME deficit from the Siberian Plateau. We show that during 1980–2020, droughts induced by exogenous PME deficit account for 45% of all droughts that occurred in China’s coastal region, and for 7% of all droughts in the northwestern regions. Under climate scenario SSP245 (SSP585), limiting warming to 1.5 °C compared to 2 °C above pre-industrial levels could avoid 60% (84%) of exogenous drought exposure. This would in turn reduce population exposure by 40% (49%), and economic exposure by 73% (66%). Our study unravels how exogenous PME deficit drives droughts in China, underscoring the role that external drivers have on regional droughts and associated future prediction.