Steady growth forecast for nation's export sector

Since the beginning of this year, despite multiple pressures including uneven global economic recovery, rising geopolitical uncertainties and especially the US imposition of high tariffs on Chinese goods, China's exports maintained relatively high growth year-on-year, showing resilience well beyond market expectations.

In the first three quarters, China's total exports reached $2.8 trillion, up 6.1 percent year-on-year — the highest growth rate for the same period since 2023. Net exports of goods and services contributed 1.5 percentage points to year-on-year GDP growth, the second-highest contribution in the past decade for the same period.

Overall, I expect China's share of global exports to continue rising in 2025, further consolidating its relative advantage in global export competitiveness.

Some have attributed China's stronger-than-expected export performance to front-loaded shipments by Chinese firms in the first half to avoid new US tariffs. However, if the export surge was mainly driven by such factors, growth should have been concentrated in the first half. Yet, US import growth has slowed notably since April, while China's exports maintained solid growth in the third quarter.

Moreover, the export momentum did not come primarily from the US market or transshipment hubs such as the Association of Southeast Asian Nations, but from simultaneous expansion into multiple markets including ASEAN, the European Union, Africa and Latin America. This shows that China's export resilience should not be viewed as a temporary fluctuation, but rather a result of a structural reshaping of long-term growth drivers.

China's export resilience stems from market diversification and product structure upgrading. While exports to the US have continued to decline, exports to most non-US markets have maintained rapid growth.

In the first three quarters, among major export destinations, China recorded negative year-on-year growth only in exports to the US, Russia and South Korea. By contrast, exports to Africa, ASEAN, India, the United Kingdom, the EU, Latin America and Canada all saw significant increases, together contributing about 6.3 percentage points to total export growth.

On the one hand, Europe's demand recovery and the accelerated industrialization of emerging markets have created favorable conditions for Chinese exports. From January to August, the EU's total imports (in euro terms) rose 4 percent year-on-year, with imports from China up 9.4 percent.

Meanwhile, emerging markets are accelerating industrialization and infrastructure construction, driving demand for related equipment and components. In the first three quarters, China's exports of electromechanical and transport equipment to seven major ASEAN members — Vietnam, Thailand, Indonesia, Singapore, Myanmar, Malaysia and the Philippines — grew 28.3 percent and 42.7 percent year-on-year, respectively. From January to August, China's exports of ships, vehicles and machinery to Africa rose 80.1 percent, 55.4 percent, and 32.1 percent year-on-year, respectively.

On the other hand, Chinese companies have been actively expanding into overseas markets. From January to August, the share of Chinese goods in the EU's total imports rose to 21.9 percent, up 1.1 percentage points year-on-year. Among emerging markets, the share of imports from China increased by 1.4 percentage points in India, 2.1 in Brazil, 1.5 in Malaysia, and 0.4 in South Africa over the same period.

Thanks to the rise of emerging markets, China's dependence on the US market has continued to decline. Between 2018 and 2024, the share of exports to the US in China's total exports dropped from 19.2 percent to 14.7 percent, and further to 11.4 percent in the first three quarters of 2025.

From a product perspective, exports of consumer goods have come under pressure, while exports of intermediate and capital goods have grown strongly, supporting overall exports.

Intermediate goods — components, materials and semi-finished products used to produce other goods — reflect a country's capability in global supply chains. Capital goods are machinery, equipment and technology-intensive products used for expanding production capacity, while consumer goods are final products aimed at end markets, often in labor-intensive industries. A rising share of intermediate and capital goods alongside a declining share of consumer goods is generally seen as a sign of structural upgrading.

In recent years, China's export structure has significantly upgraded. From 2017 to 2024, the share of intermediate goods in total exports rose from 41.7 percent to 45.4 percent, capital goods fell slightly from 21.2 percent to 20 percent, and consumer goods dropped from 37.2 percent to 34.6 percent. In the first three quarters of 2025, the share of intermediate goods rose further to 47.4 percent, while consumer goods fell to 32.5 percent.

Intermediate and capital goods have become the main drivers of export growth. In the first three quarters, exports of intermediate goods grew 10.2 percent year-on-year, contributing 4.7 percentage points to total export growth; and capital goods grew 6.9 percent, contributing 1.4 percentage points.

"Going global" companies rely on importing key components and raw materials from China, boosting intermediate and capital goods exports.

Some mid and low-end industries have shifted to lower-cost economies due to rising costs and trade frictions. To expand overseas markets, Chinese firms have invested in local manufacturing abroad. Yet, because China retains advantages in key components, machinery and materials, foreign firms still depend heavily on China's upstream supply chains — thereby driving exports of intermediate and capital goods.

At the same time, China's domestic industrial chains are rapidly upgrading toward higher value-added segments. Between 2017 and 2024, the share of high-tech manufacturing in large-scale industrial output rose from 12.7 percent to 16.3 percent. In the first three quarters of this year, exports of high-tech products continued to grow, with autos, ships and integrated circuits up 10.8 percent, 21.4 percent and 23.3 percent year-on-year, respectively.

The transformation of China's export structure is deeply reshaping its trade relationships with different economies. For developed economies such as the US and the EU, China's improved competitiveness in high-tech manufacturing is challenging their traditional industrial advantages. For mid-tier economies such as ASEAN and Mexico, the spillover effects of China's industrial chains have strengthened regional division of labor and cooperation. However, as these economies upgrade local manufacturing and geopolitical frictions intensify, they are seeking to transition from contract manufacturing toward higher-value-added segments such as research and development and design to play a more proactive role in regional supply chains. For emerging markets still at the lower end of value chains, China's exports of mid and low-end equipment and industrial capacity fit well with their industrialization needs.

China's trade relationship with developed economies is shifting from primarily complementary to a new pattern of "coexistence of complementarity and competition". Trade frictions and industrial rivalries will exert sustained pressure on bilateral trade.

Looking ahead, China's export growth to developed economies such as the US and the EU may find it difficult to return to previous highs, but there remains room for growth in high-value-added intermediate and capital goods exports.

For developing economies, stronger local consumption and the spillover effects of China's industrial chains have led to rapid import growth from China. ASEAN has overtaken the EU and the US to become China's largest export destination.

As these developing economies improve their manufacturing capacity and local supply chains, some of their consumer goods are gradually replacing China's previous market share. However, their growing demand for China's upstream intermediate and capital goods continues to rise.

Looking forward, China's exports are expected to enter a phase of high-quality and steady growth. Although exports to the US face downward pressure, deepening engagement with the EU and other developed markets — along with export expansion of intermediate and capital goods to emerging economies driven by moderate industrial relocation — will continue to strengthen China's export stability and resilience.

In conclusion, I propose a series of policy measures to bolster China's economic resilience and global competitiveness, calling for efforts to accelerate industrial upgrading, strengthen domestic demand and promote high-quality globalization of Chinese enterprises.

The recommendations include advancing technological innovation and expanding the services sector to support structural transformation and ease employment pressures. I also urge comprehensive reforms to boost domestic demand and gradually shift from an export-dependent model to a more balanced growth structure.

Enterprises expanding overseas should do so in a steady and orderly manner. Key and strategic sectors should remain within China to safeguard economic security and employment, while firms with technological or brand advantages are encouraged to pursue deeper international integration through investment, mergers and partnerships.

For export-oriented small and medium-sized enterprises, I suggest expanding markets through overseas warehouses, cross-border e-commerce and local service networks rather than simple capacity relocation.

I also call for improving overseas service systems for Chinese enterprises with stronger financial and information support, as well as deepening bilateral and multilateral trade cooperation through free trade and investment agreements to foster mutually beneficial relations and resolve differences through shared development.

The writer is chief economist at Yuekai Securities and president of the company's research institute.

The views do not necessarily reflect those of China Daily.