Tariff Wars Fail to Crush China’s Exports

This year, the world has witnessed a trade war with the broadest country coverage and highest tariff increases since the 1930s. Despite this, China’s exports have remained resilient.

In the first eight months, China’s total exports reached $2.5 trillion, a year-on-year increase of 5.9%. Export growth in August (in USD terms) was 4.4%, slower than July’s rate, but actual export activity did not cool down. The decline in growth was mainly due to the high base effect from August of the previous year, when Typhoon “Gemi” delayed July exports to August.

An analysis by export destination shows that China’s exports to emerging markets, especially ASEAN, Africa, and Latin America, continued to grow strongly, offsetting the decline in exports to the U.S. In the first eight months, in USD terms, China’s exports to Africa, ASEAN, and Latin America increased by 24.7%, 14.6%, and 5.8% respectively, while exports to the U.S. fell by 15.5%.

“High quality and low price” is an irreplaceable competitive advantage of Chinese products. In terms of export unit prices, for some products, the U.S.’s import prices from other countries are 100% higher than those from China. Even with high tariffs, Chinese products still maintain a price advantage compared to imports from other countries.

With the expansion of global AI demand, downstream sectors such as consumer electronics, IoT, industrial internet, and automotive electronics are developing rapidly, driving a significant increase in China’s electronics exports.

Since 2024, China’s integrated circuit exports have maintained double-digit growth. After Trump’s temporary exemption of tariffs on some electronic products in April this year, integrated circuit exports saw renewed year-on-year growth. In the first eight months, integrated circuit exports (in USD terms) increased by 22.1% year-on-year, higher than the full-year growth rate of 17.4% in 2024.

The importance of exports to China’s economy this year is self-evident. The stabilization of the economic fundamentals and the recovery of market risk appetite in the first half of the year were largely supported by the rebound in exports. Assessing Chinese assets requires full attention to the positive implications of export resilience.