Commentary: China’s Export Engine Is Shifting, Not Sputtering

The Western push to "de-risk" and reduce economic dependency on China has surprisingly resulted in increased resilience in Chinese exports. Despite significant U.S. tariffs, China’s exports in 2025 grew at a robust estimated rate of 5% year-over-year in dollar terms, providing strong support for the Chinese economy. This trend defies expectations given the external pressures and highlights the adaptability of China’s export sector [para. 1].

Looking ahead to 2026, experts predict that China’s export resilience will persist, albeit at a slightly slower growth rate of 4%. This is still notably higher than the projected global average. This resilience stems from China's comprehensive supply chains and its ability to move upmarket, focusing more on higher-value intermediate and capital goods rather than low-cost consumer products. The main concern for Beijing is not a decline in exports, but managing the domestic employment risks associated with rapid industrial transformation [para. 2].

In 2025, China’s exporters initially rushed to ship goods to the U.S. before new tariffs took effect, resulting in a temporary surge. However, exports to the U.S. ultimately fell sharply, down 18.9% in the first 11 months of the year, reducing China’s overall export growth by about 2.8 percentage points. This decline was more than compensated by increased shipments to Africa, ASEAN, India, the European Union, and Latin America, which together contributed approximately 6 percentage points to export growth [para. 3].

The composition of China’s exports also shifted significantly. Exports of intermediate goods and capital goods rose by 9.7% and 6.0% respectively in the first 10 months of 2025, while consumer goods exports fell by 0.8%. This indicates that global supply-chain restructuring is repositioning China as an essential supplier of higher-value products rather than sidelining it [para. 4].

China’s new export competitiveness is driven by the sale of machinery and components vital for the industrialization of emerging markets in Asia, Africa, and Latin America. The forecast for 2026 is that China’s export growth will moderate to around 4%, still outperforming the WTO’s expected global trade growth of 0.5%. China’s share of the global export market is projected to rise to 15.5% in 2026, from 14.6% in 2024 [para. 5].

While the negative impact of lost U.S. export demand may decrease, gains from other markets could soften. A period of détente in the U.S.-China tariff conflict is foreseeable, especially ahead of the 2026 American midterm elections, as further tariffs could be politically costly. Nonetheless, targeted pressures—especially in high-tech areas—are likely to continue. U.S. import demand is expected to stabilize, aided by a more accommodative Federal Reserve and fiscal expansion [para. 6].

A major uncertainty is the possible return of Donald Trump as U.S. President, which could reignite trade tensions given his unpredictable approach to tariffs [para. 7][election_info].

Non-U.S. markets will remain key drivers. From 2015 to 2024, China’s exports to ASEAN rose at an 8.7% annual rate, but this pace may slow in 2026. The EU will still be a significant market, albeit with new regulatory headwinds. Africa’s demand for capital goods also aligns well with China’s industrial strengths [para. 8].

To maintain export strength, China must focus on technological upgrading and reform, address employment challenges through workforce retraining, and bolster domestic consumption by increasing household incomes and improving the social safety net [para. 9][para. 10][para. 11]. Ultimately, managing industrial relocation while retaining critical capacity is essential for continued global expansion and domestic stability [para. 12].