Trade War Monitor, Aug. 25: China’s Exports of New Energy Products Rise Further in July

China’s exports of new energy products, particularly electric vehicles (EVs), lithium-ion batteries, and solar cells, continued to rise in July, driven primarily by robust demand from overseas markets. In July alone, China exported 410 million lithium-ion batteries, 1.1 billion solar cells, and 325,000 electric passenger vehicles, signaling strong growth in these sectors despite headwinds from tariffs and trade tensions[para. 1].

China’s fiscal strength also saw notable improvement, with fiscal revenue in July exceeding 2 trillion yuan ($278 billion), reflecting a 2.6% year-on-year increase—the largest monthly expansion of 2025. For the first seven months of the year, cumulative fiscal revenue reached over 13.5 trillion yuan, up 0.1% from the prior year, marking the first cumulative growth recorded in 2025. Tax revenue served as the main driver for this expansion, growing 5% year-on-year in July, while non-tax revenue declined for the third straight month, dropping 12.9%[para. 2][para. 4][para. 5].

However, these fiscal and export successes were offset by labor market concerns. China’s surveyed urban youth unemployment rate (for those aged 16 to 24) increased sharply in July as new graduates entered the job market, rising by 3.3 percentage points from the prior month to 17.8%. This is the second highest rate since China began using a new reporting method that excludes current students. The overall surveyed urban unemployment rate edged up to 5.2%, unchanged from the previous year[para. 2][para. 6][para. 7].

China’s technology firms, facing growing geopolitical risks and trade restrictions, are increasingly seeking alternative funding avenues. Luxshare Precision Industry Co. Ltd., a key assembler of Apple iPhones, announced its intention to list shares on the Hong Kong Stock Exchange. Luxshare’s share prices have recovered to pre-tariff announcement levels following a drop in April, attributable to reciprocal tariffs announced by then U.S. President Donald Trump. This move highlights a broader trend of Chinese tech firms turning to international markets to mitigate trade war risks and diversify their capital sources[para. 8][para. 9][para. 10].

Although China’s new energy exports surged, the momentum was mitigated by a pronounced decline in sales to the United States, where new tariffs have impacted a broad array of sectors. In July, lithium-ion battery exports were up 25.4% in volume from a year earlier to 410 million units, with export value increasing 31.7% to more than $7 billion. Cumulatively, battery exports in the first seven months rose 26.2% to $41.1 billion. Solar cell exports soared 56% year-on-year to 1.1 billion units. Electric vehicle exports grew 69.4% in volume and 48.9% in value, reaching nearly $5.92 billion in July[para. 11][para. 12][para. 13].

Looking forward, there is debate about the sustainability of China’s export growth, given the “front-loading” effect of the U.S. tariffs. While short-term pressures are expected for exports to the U.S. and ASEAN countries, opportunities for growth remain in emerging markets, including the Middle East and Africa, especially due to initiatives like the Belt and Road. Meanwhile, exports to Europe continue to decline as its competitiveness wanes[para. 14][para. 15][para. 16].

[Editors’ note: Trade War Monitor is compiled and edited by Lu Zhenhua][para. 18].