Behind 260k data points: The growth logic of China's foreign trade has changed

How does AI · Trade War catalyze China’s diversified foreign trade layout?

45.47 trillion yuan is China’s total import and export volume of goods in 2025, maintaining the world’s number one position. Visual China / Photo

In 2018, the U.S. government initiated a trade war. In 2019, China’s trade with the U.S. decreased by 10.7% in response.

In 2025, the U.S. government launched another trade war. That year, China’s trade with the U.S. declined by 18.2%.

But this is only a partial change; in fact, between the two trade wars, China’s total foreign trade increased by 14 trillion yuan, and it has consistently remained the world’s largest goods trading nation.

In January 2026, Wang Jun, Deputy Director of the General Administration of Customs, introduced that China’s import and export had maintained growth for nine consecutive years, the longest continuous growth since accession to the WTO.

During the 14th Five-Year Plan period, China’s cumulative annual growth rate of import and export scale was 7.1%. Even during the trade war, it continued to grow, with a 3.4% growth rate in 2019 and 3.8% in 2025.

In the first two months of 2026 alone, the growth rate reached 18.3%.

This data is uncommon globally. A United Nations report shows that from late 2024 to early 2025, global merchandise trade growth was only 2.5% to 3%, with a significant slowdown expected in 2026. The World Trade Organization even sharply downgraded its forecast for global merchandise trade growth in 2026 to 0.5%.

Faced with complex environments and a huge scale, how can China’s foreign trade still maintain high growth?

Southern Weekly’s reporter compiled data on customs import and export across various regions in 2025, 20.57 million import/export records with major trading partners, and detailed data on key industries totaling 53.7k entries.

Statistics show that between the two trade wars, the logic of China’s foreign trade growth has changed. It can be summarized into three trends: diversification, breakthrough in intermediate goods, and deepening of private enterprise overseas expansion.

Tariff shifting

In 2018, the U.S. government provoked a trade war. The following year, China’s second-largest trading partner dropped to third, with ASEAN replacing it. ASEAN, or the Association of Southeast Asian Nations, includes Thailand, Vietnam, Malaysia, and 8 other member countries.

In 2025, another round of trade war erupted. Customs data show that China’s imports and exports worldwide increased throughout the year, except for a significant decline with the U.S. The total trade volume with the U.S. decreased by 18.2% year-on-year, with exports to the U.S. down 19.5% and imports from the U.S. down 14.1%.

This is the first time in nearly a decade that all three indicators of trade with the U.S. have fallen by double digits.

However, China’s overall import and export volume was not dragged down by the decline in trade with the U.S. In 2025, import and export growth was 3.8%, with exports up 6%.

“This ‘one increase and one decrease’ is the result of our diversification strategy,” said Wang Wentao, Minister of Commerce, at a press conference during the Fourth Session of the 14th National People’s Congress.

Looking at total trade volume in 2025, ASEAN grew by 8%, the EU by 6%, Latin America by 6.5%, and Africa by 18.4%. ASEAN, the EU, and the U.S. are China’s top three trading partners. Countries involved in the Belt and Road Initiative account for over half of China’s trade.

Wang Wentao summarized it as “When the West is not bright, the East shines; when the North is absent, the South appears.”

“China’s diversification strategy has been highly effective.” Liu Yingkui, former deputy director and researcher at the China Council for the Promotion of International Trade Research Institute, explained to Southern Weekly that in response to the U.S. repeatedly imposing tariffs, technology bans, and other trade protectionist measures, China has precisely countered and continued to implement market substitution strategies. High-end consumer goods and high-tech products are shifting to the EU, Japan, South Korea, and other developed economies, while daily consumer goods and intermediate products are traded and cooperated with developing countries.

Trade with the U.S. still remains substantial. By country, the U.S. is still China’s largest trading partner.

Liu Yingkui pointed out that because some Chinese products are irreplaceable in competitiveness, they often transit through third countries to enter the U.S. market, which raises prices and costs. Many products directly exported to the U.S. are borne by American consumers through high tariffs.

Professor Liu Zhiku from Fudan University’s School of Economics and Deputy Director of the Fudan Global Supply Chain Research Center told Southern Weekly that the decline in China-U.S. trade in 2018 and 2025 was due to reduced quantities, with little change in export prices.

This indicates that the cost of U.S. tariffs is almost borne by U.S. importers. Some U.S. studies also show that tariff hikes on Chinese goods increase costs for American consumers, reduce their purchasing power, and lead to a decline in China’s exports to the U.S.

This aligns with the experiences of frontline practitioners.

“Starting early 2025, doing business in the U.S. market has become more difficult,” said Cheng Xiao, a freight forwarder providing overseas warehouse services for U.S. cross-border sellers. In previous Octobers, his warehouses would be full, but in October 2025, Chinese sellers had yet to show activity.

He told Southern Weekly that the difficulty was not only due to policy changes on cross-border platforms but also because U.S. consumers’ purchasing power generally declined. Tariffs increased taxes paid by U.S. consumers, and layoffs in companies meant many people only bought essentials.

Zhao Ran, head of overseas markets at a medical device company in Shenzhen specializing in brain treatment, told Southern Weekly that their main market is the U.S., and business there is good. “Although tariffs have increased, we also raise prices for end customers. Even so, we still have a price advantage.”

Rise of intermediate goods

In China’s foreign exchange earnings in 2025, 61% came from electromechanical products, reaching a record high.

The Ministry of Commerce defines electromechanical products as machinery, electrical equipment, transportation tools, electronic products, electrical appliances, instruments and meters, metal products and their components, rubber tires, metal structural parts, glass, ceramics, asbestos products, and other basic materials, as well as toys, musical instruments, medical furniture, office metal furniture, lighting fixtures, lighters, etc.

Most of the highest export values in various customs regions are electromechanical products, often followed by high-tech products. Customs officials from three different regions explained to Southern Weekly that electromechanical and high-tech products largely overlap.

It can be said that electromechanical products are the main body of “Made in China.”

The UN classifies international trade commodities into three categories: capital goods, intermediate goods, and final consumer goods.

For electromechanical products, capital goods refer to machinery and equipment used by enterprises for production, such as industrial mother machines; intermediate goods are parts, raw materials, or components supplied to factories for processing and assembly, such as chips; consumer goods include laptops and mobile phones.

The China Electromechanical Products Import and Export Chamber of Commerce’s report shows that in 2025, intermediate goods accounted for 46% of electromechanical exports, surpassing consumer goods, with a growth rate of 14.8%, higher than the overall 9% growth of electromechanical products.

The rapid growth of intermediate goods indicates a focus on high-value-added components, becoming the core driver of electromechanical growth. This also reflects China’s shift from “processing and assembly” to “climbing the industrial chain,” as “processing and assembly” mainly shows exports of consumer goods, while upgrading core components emphasizes intermediate goods.

Gao Shiwan, spokesperson for the China Electromechanical Products Import and Export Chamber of Commerce, told Southern Weekly that in developed countries, the proportion of intermediate goods trade is usually around 60%. Currently, China’s intermediate goods trade in electromechanical products is still below 50%.

Southern Weekly’s data shows that among electromechanical exports, the top three categories are automated data processing equipment and parts, integrated circuits, and automobiles. Among these, 47% of automated data processing equipment and parts are laptops, though their growth rate has slightly declined.

Gao Shiwan explained that China used to import components, do processing and assembly, and then export complete machines, with mature production scale. After 2018, foreign and Chinese enterprises have expanded into Southeast Asia, India, and other regions, reducing exports of terminal consumer products, while increasing upstream high-value-added component exports.

The most typical intermediate product is integrated circuits, which have the highest growth rate among electromechanical products at 27.4%. “Currently, the integrated circuit boom is strong, with good market demand, shipment volume, and prices, driving high growth,” Gao said.

Southern Weekly’s statistics show that within integrated circuits, 42% are memory chips, 33% are processing chips, 16% are general-purpose chips, and 9% are other types.

Memory chips store data, such as flash memory and RAM; processing chips like CPUs and GPUs provide computing functions, acting as the “brain” of electronic devices; general-purpose chips include power management, signal processing, sensors, etc.

Gao noted that AI and the construction of global data centers have created huge demand for memory chips, causing prices to rise. In 2025, the market size of memory chips is rapidly approaching that of processing chips. China’s processing chip level is also narrowing the gap with international advanced standards.

Electromechanical products are also the largest export category for 27 Chinese provinces, though their industrial chain advantages vary, and regional focuses differ.

Southern Weekly’s data shows Guangdong, Sichuan, Chongqing, and Hainan have the highest exports of automated data processing equipment and parts; Jiangsu, Shanghai, Hubei, and Shaanxi lead in integrated circuits; Zhejiang, Fujian, and Guangxi in electrical equipment; Anhui, Hunan, Inner Mongolia, and Jilin in automobiles; Beijing, Henan, and Shanxi in mobile phones.

In terms of import structure, China’s weaknesses in core components of electromechanical products are evident. For example, the largest import category is also integrated circuits, especially processing chips, with the highest variety and value.

“Processing chips rely on an advanced process full industry chain, and there are still gaps in equipment, materials, and technology,” Gao said.

Currently, the U.S. and the EU are China’s two main sources of imported integrated circuits, with the U.S. still the first choice, with import values exceeding those from the EU.

Electric cars go out, oil cars come in

Electromechanical products include automobiles, which deserve special analysis. Historically, China imported cars from Europe and Japan, but in 2025, China’s car exports to the EU exceeded imports for the first time.

That year, China’s car export growth was 22%. About 40% were passenger cars, mainly new energy electric vehicles.

Southern Weekly’s data shows that in 2025, China exported 454.7k passenger vehicles to the EU, worth 136.67 billion yuan, while importing 172k cars from the EU, worth 75.37 billion yuan.

Among exported cars to the EU, new energy vehicles accounted for 51%, hybrid vehicles 35%. Among imported cars from the EU, fuel vehicles accounted for 95%. In other words, what goes out are electric cars, and what comes in are oil-powered cars.

A BYD dealership on the streets of London. Visual China / Photo

“Industrial changes have led to shifts and even reversals in trade flows,” Gao said. Previously, fuel vehicles dominated global auto sales, with Japan, Germany, the U.S., and South Korea leading. Now, China’s breakthroughs and rapid iteration in battery, motor, and electronic control systems have highlighted cost and efficiency advantages, making Chinese new energy vehicles more competitive globally compared to German and Japanese manufacturers.

Southern Weekly also found that China’s auto trade surplus with the EU comes from 23 countries, with the largest surplus in Belgium. Four countries still run a deficit: Germany, Slovakia, Romania, and Austria.

Compared to 2024, when China had 20 surplus and 7 deficit countries with the EU, in 2025, new surplus countries include Sweden, Hungary, and Portugal.

“Different countries have varying policies and attitudes toward electric vehicle industries, and market demand and penetration rates differ. But overall, electric vehicles are a major trend replacing fuel cars worldwide,” Gao said.

Liu Yingkui summarized that China exports terminal products and high-end brand vehicles to the EU, forming a “parallel” trade relationship with Europe and America. This is also why the EU and the U.S. may impose restrictions, such as minimum prices on Chinese new energy vehicles.

Ready-to-wear cools, fabrics break through

Statistics show that the growth slowdown is mainly in traditional labor-intensive industries, especially clothing and plastic products.

In 2025, China’s clothing and apparel accessories exports declined by 5% year-on-year, and plastic products by 1.3%.

“Because the U.S. imposed tariffs on China, some large orders for domestic garment factories shifted to Southeast Asia,” said Su Xi, a Zhejiang-based trader of clothing and accessories, and second-generation accessory factory owner.

She told Southern Weekly that some orders in Southeast Asia are still held by Chinese companies. Recently, she traveled to Cambodia, where over 90% of factories are foreign-invested, mainly Chinese.

However, demand in foreign markets has not sharply decreased due to tariffs; large quantities of fabrics and accessories still need to be purchased from China.

Su Xi observed that Southeast Asia’s clothing supply chain is not yet fully established. Her family’s accessory factory mainly produces buttons, which require different processing links like electroplating and painting, chains that are not yet fully developed in Southeast Asia. Some accessories, like resins, have already formed supply chains there.

Southern Weekly’s data shows that among textile and clothing exports, Zhejiang, Jiangsu, and Guangdong have the highest values, mainly exporting knitted and crochet fabrics to Vietnam and Cambodia. These are common fabrics.

Su Xi shared her observations on social media about tariffs and industry shifts, attracting many industry peers’ comments. A boss from Jiangsu said they had already set up a garment factory in Africa.

“Despite growth in South America and Africa’s consumer markets, for mid-to-high-end brands, these regions are still mainly production bases, with major markets in Europe and America. The European and American markets are also stratified; large-volume, price-sensitive orders have moved to Southeast Asia, but mid-to-high-end brands still rely on China,” Su Xi said.

Some provinces’ labor-intensive industries have also grown.

For example, Zhejiang’s textile output grew by 4.4%, clothing by 4.4%, and plastic products by 5.9%. Shandong’s clothing exports increased by 1.4%.

Southern Weekly’s data shows that the highest export values of textiles and clothing to the U.S. are mainly cotton T-shirts, sports shirts, and wool sweaters from Zhejiang.

Among the top ten textile and clothing products exported to Africa, nine are from Zhejiang, one from Shandong; in Latin America, Zhejiang also dominates the top ten, with half being finished garments and half fabrics.

Overall, in 2025, textile and clothing exports experienced a nationwide decline, with Zhejiang’s growth driven mainly by fabric factories. While garment exports cooled due to tariffs, fabric exports increased due to industry shifts in Southeast Asia, Latin America, and Africa.

This is a traditional industry’s intermediate product breakthrough, supported by a complete industrial chain. When terminal consumer goods are restricted, intermediate products can still support growth.

“Vertical cooperation” with developing countries

ASEAN, Latin America, and Africa are the growth poles of China’s foreign trade in 2025.

ASEAN is China’s largest trading partner in both exports and imports, with Vietnam being the largest. China exports intermediate goods like integrated circuits, display modules, and fabrics to Vietnam, and imports display modules, mobile phones, and raw materials like minerals, steel from Vietnam.

Liu Yingkui explained that China exports parts and intermediate goods to ASEAN, which then processes and assembles them. Some final products are consumed locally, some are re-exported to the U.S. and other third countries, and some are re-sold to China. Among ASEAN countries, Vietnam’s proximity and well-developed manufacturing industry make its trade and investment with China closer.

“Most cooperation with developing countries is vertical in the industrial chain,” Liu said. China provides key parts and intermediate goods, while these countries leverage labor, land, and other cost advantages to focus on processing and assembly.

Currently, U.S. restrictions on re-exporting Chinese products through third countries are tightening, with stricter origin verification, further limiting re-export trade.

Africa is China’s fastest-growing foreign trade region. The picture shows containers in Tanzania. Visual China / Photo

In Africa, China’s exports grew by 26.5%, imports by 6%, making it the fastest among major economies.

Southern Weekly’s data shows exports mainly to Nigeria, South Africa, Egypt, and Liberia, accounting for nearly 40%. Imports are mostly from South Africa, the Democratic Republic of Congo, Angola, Guinea, and Zambia, making up 70%.

“High growth in exports to Africa benefits from recent economic development, increased consumption capacity, and market expansion,” Liu explained. Africa’s population exceeds a billion, creating huge demand for daily consumer goods. Its early stage of industrialization also drives demand for machinery, steel, cement, and other capital goods.

Some Chinese investments and manufacturing are also in Africa, such as clothing and footwear, with Chinese companies exporting intermediate goods for local processing, some of which are sold to Europe and America. “Electronics and other processed products require skilled labor, which Southeast Asian countries are better at,” Liu added.

Customs data show China’s main exports to Africa include phones, cars, laptops, polyester fabrics, ships, and refined oil. Imports mainly consist of raw materials like crude oil, aluminum, copper, and gold.

Latin America’s situation is similar. China mainly exports phones, display parts, TVs, and laptops, mainly to Mexico and Brazil. Imports focus on raw materials like crude oil, iron, copper, and soybeans.

No longer just re-export

Liu Zhiku divides the global market into four: China’s exclusive market, the U.S. exclusive market, the China-U.S. shared market, and other markets. It’s a simplified view of China, the U.S., re-export trade hubs, and non-re-export zones.

If reduced exports to the U.S. are diverted through re-export trade, there will be a phenomenon where China’s exports to the U.S. drop sharply, but exports to re-export hubs and their exports to the U.S. increase.

However, data from the first 11 months of 2025 show that while China’s exports to the U.S. declined, the effect of re-export hubs exists, but the non-re-export trade effect is becoming stronger. These markets should be key expansion targets in the future.

“After the 2018 trade war, Chinese companies used re-export routes through Vietnam, Mexico, and others to finally reach the U.S. market. By 2025, Chinese companies’ overseas strategies have shifted to deepening their local markets in these regions, with Southeast Asia, Latin America, and Africa showing this trend. Overseas expansion also makes China’s ties with these regions closer,” Liu said.

In this process, private enterprises’ overseas expansion has made a huge contribution to China’s exports.

In 2019, private enterprises’ import and export volume first surpassed that of foreign-invested enterprises, becoming the main force of China’s foreign trade. In 2025, private enterprises accounted for 57% of total imports and exports, foreign-invested enterprises 29%, and state-owned enterprises 13%.

Liu explained that due to China’s significant supply chain advantages, as companies expand overseas markets, they also export intermediate and capital goods back to their home country, supporting China’s strong export performance. Imports, often recorded in the countries where overseas factories are located, are no longer reflected in China’s trade accounts.

However, some entrepreneurs have told Liu that their exports to certain countries have surged because of the need to import large quantities of intermediate and capital goods during the initial phase of building overseas factories. These are one-time purchases; once the factories are built, such imports are no longer needed. This suggests that if companies can find more cost-effective supply chains globally, domestic exports to them might be replaced.

More importantly, China’s rapid export growth benefits from expanding into non-American economies, but its core high-end manufacturing markets remain in Europe and America. That is, as China’s manufacturing climbs the value chain, it will still be closely linked with the U.S.

“Complete decoupling between China and the U.S. is unrealistic,” Liu said. Data shows that many Chinese companies still mainly go to Europe, America, and South America, despite high tariffs between China and the U.S.

Although tariffs have increased significantly, both sides have exemption lists. For products needed domestically and without substitutes, they are excluded from tariffs.

“Maintaining external trade resilience is especially important,” Liu emphasized. To do so, increasing R&D and design investment to make products irreplaceable is key to building core competitiveness.

Zhao Ran’s company has established a local branch in the U.S., adopting a local name. “In the past, many Chinese manufacturers mainly did OEM, but now we don’t need that anymore. We want to build our own brand.”

Jack Welch, former chairman of General Electric and dubbed “the world’s top CEO,” listed in his 2012 book Winning a question that concerned European and American CEOs at the time: “Chinese competition is coming in like a tidal wave. How can we survive?”

His answer was to face the challenge head-on. “China is now capable of changing the rules of the game in business. Trade restrictions, demanding RMB appreciation, setting intellectual property laws, and other political measures cannot reverse its growth momentum.”

(Note: The names Cheng Xiao, Zhao Ran, and Su Xi are pseudonyms in the article.)

Southern Weekly Reporter Zhou Xiaoling

Editor: Zhang Yue