Commentary: The Real Story Behind China’s Export Surge

In the first half of 2025, China’s exports experienced steady growth, driven primarily by emerging economies, with non-U.S. developed countries such as the EU, Japan, and the U.K. providing moderate support. Cumulative exports rose 5.9% year-over-year from January to June, with emerging economies contributing 4.7 percentage points to this growth. Non-U.S. developed countries added 1.4 percentage points, while the U.S. market dragged down growth by 1.5 percentage points. Within emerging markets, ASEAN and India, the Middle East, and Africa played crucial roles, contributing 5.5, 1.5, and 1.4 percentage points, respectively, to overall emerging market exports[para. 1].

In terms of products, exports of electronic equipment, components, and certain consumer goods like toys, mobile phones, and jewelry stood out. The cumulative annual growth for electronic components reached 8.2%, and for light industrial products, 6.6%. Among capital goods, electrical equipment, precision instruments, and machinery improved their contributions compared to the previous year. On the consumer side, toys, jewelry and precious metals, mobile phones, and cross-border e-commerce recorded the highest increases, signaling strong global demand for both intermediate and finished products[para. 2].

A more granular analysis shows that China’s export growth to emerging economies primarily came from production materials—intermediate goods contributed 2.4 percentage points and capital goods 1.0 point, whereas consumer goods had a negative impact, reducing overall growth by 3.7 percentage points. This pattern highlights the reliance of emerging markets on Chinese inputs for manufacturing and industrialization[para. 3]. Conversely, exports to non-U.S. developed economies grew substantially, mainly due to consumer goods (2.7 percentage points), with intermediate and capital goods also contributing. Lithium batteries and toys made significant individual contributions, as did electrical equipment and solar cells[para. 4].

The idea that recent export surges were driven by “front-loading” ahead of tariffs is challenged by the data. Although the U.S. saw a jump in import growth early in the year, this was concentrated in goods from Europe and Switzerland (notably gold, silver, jewelry, and pharmaceuticals), which aligns more with targeted stockpiling than broad transshipment from China[para. 5][para. 6]. Further, China’s exports to ASEAN and other emerging economies are more indicative of supply chain integration—China exports production materials to these economies, which then manufacture consumer goods, some destined for the U.S. The trends in export performance by product and destination do not align with the theory of widespread “front-loading via transshipment”[para. 7][para. 8].

Looking ahead, the impact of “front-loading” on export growth is estimated to be limited, explaining only about 30% of the current surge. For July, only about 2 percentage points of export growth are attributed to this effect[para. 10].

Regarding future trends, U.S. demand for imports may not be fully exhausted, as U.S. import volumes have not yet reached equilibrium with consumer demand despite recent declines, suggesting potential for further import growth[para. 11]. In contrast, EU imports and consumption have reached a “balance point,” implying future import growth will align closely with demand, at a lower level than the recent past[para. 12]. China’s exports to emerging economies may face short-term headwinds due to U.S.-imposed tariffs but should remain resilient in the medium term, buoyed by investment-driven demand and urbanization, especially in regions such as Africa and the Middle East[para. 13][para. 14]. Moreover, China’s market share continues to grow in these regions, with Chinese exports increasingly replacing those from the EU[para. 15].

Finally, a broader middle class in emerging economies is favoring higher-value Chinese exports, as illustrated by substantial growth in exports of vehicles, cross-border goods, and home appliances. This shift signals the upgrading of China’s export structure and ongoing competitiveness in global markets[para. 17].