In July, China recorded a 23.9% rise in exports, the second month in a row of growth above 20%, according to the latest customs data. Imports climbed 27.5%, which led to a record trade surplus of $112.5 billion. This impressive performance happened despite challenges from extreme weather, including disruptions at key ports caused by Typhoon Bavi, which severely impacted Zhejiang province, a vital economic hub.
The impact of Typhoon Bavi on Zhejiang
Typhoon Bavi was the strongest storm in nearly 80 years to hit Zhejiang province, home to some of China’s most important ports and manufacturing centers. The storm forced temporary shutdowns at several of the country’s busiest ports, slowing trade flows. However, despite the interruptions, China managed to maintain robust export levels. This was due in large part to the strong demand for high-tech and green-tech goods, especially in the fields of artificial intelligence and energy transition.
July saw a dramatic surge in exports of advanced technologies. Chip shipments grew 117% year-over-year, while computer exports jumped 67%. Car exports leaped by 60%, and ship exports soared 92%. Exports in the general machinery category accelerated to a 31% increase in July, up from 15% the prior month, a clear sign of the momentum in the sector.
Expert perspectives on China's trade performance
According to Barclays analysts, the robust trade figures were a result of factors beyond just logistics. “AI-related and green-tech exports continue to benefit from the global AI investment cycle and energy transition,” they said in a report. This indicates that demand for China’s high-tech goods is being driven by global trends such as automation and the move toward cleaner energy.
Lynn Song, chief economist at ING Bank, emphasized the role of exports in China’s economic growth. She described them as “the main growth engine,” noting a persistent K-shaped divergence in the economy. In this scenario, external demand remains strong compared to weaker domestic consumption. Similarly, David Qu of Bloomberg Economics underlined the growing gap between traditional and technology-driven industries. He pointed out that “tech-related manufacturing showed strength, while traditional products lagged,” suggesting that China’s economic structure is shifting toward high-tech manufacturing.
Trade surplus and the role of currency
The trade surplus in July reached a staggering $112.5 billion, and the current trajectory suggests it will exceed the record levels seen last year. Import prices have also played a role in inflating trade figures. In June, import prices surged by 25% year-over-year, the fastest increase since 2006. In volume terms, however, imports only rose 4%, indicating that higher prices are a key driver behind the trade figures.
Despite government efforts to promote a more balanced trade strategy and increase import activity, exports have continued to outpace imports. The rising costs for outbound container shipping, reaching a peak since September 2024, also reflect the impact of weather-related port bottlenecks. These challenges, however, have not dented the momentum of export growth, which is largely attributed to the high-tech and AI-driven manufacturing base.
Julian Evans-Pritchard of Capital Economics noted that the slight drop in export performance in July was partly due to disruptions caused by the typhoon but still described the overall trend as strong. He emphasized that “exports remain very strong” due to the resilience of China’s high-tech sectors. Even in the face of rising tensions with key trading partners, China’s trade relationship with the European Union has grown. In July, the surplus with the EU reached a new high of $33.8 billion, showing that economic ties continue to expand despite political challenges.