China’s Export Surge: A Closer Look at H1 2024 Trade Expansion

China’s export performance soared in H1 2024, climbing 6.9 percent to RMB 12.13 trillion (US$1.67 trillion). The surge was fueled by strong showings from high-tech sectors like integrated circuits and automobiles. Nevertheless, geopolitical tensions and domestic economic pressures will temper an optimistic outlook. Additionally, the trade landscape has shifted notably, with increased trade volumes with ASEAN and Latin America, while exports to the EU, the US, Japan, and Australia have decreased. In this article, we take a closer look at China’s H1 2024 trade expansion.

China’s foreign trade in the first half of 2024 reached US$2.98 trillion, a 2.9 percent increase year-on-year in dollar terms, generating a trade surplus of US$435 billion, up 8.6 percent year-on-year. In RMB terms, the trade expansion is even more substantial – at a 6.1 percent surge year-on-year. This growth highlights China’s robust performance amid a complex global trade landscape and accelerating economic momentum.

Exports played a crucial role in China’s trade expansion, totaling US$1.71 trillion, up 3.6 percent year-on-year. Key sectors driving export growth included electromechanical products, with integrated circuits and automobiles seeing impressive increases. Integrated circuit exports surged by 25.6 percent, while automotive exports rose by 22.2 percent, showcasing China’s rising position in high-tech and automotive markets.

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The trade dynamics also shifted, with ASEAN maintaining its status as China’s largest trading partner, while trade with the EU experienced a slight dip. In contrast, trade with the US and South Korea exhibited varied trends, and the Belt and Road Initiative (BRI) countries saw a 7.2 percent rise in trade volume.

Understanding these trends is essential for grasping the broader economic and trade dynamics, as well as the international reactions to China’s evolving trade policies. This article explores the factors behind China’s strong export growth, the key markets contributing to this performance, and the outlook for Chinese exports amid rising global economic tensions.

Overview of China’s export performance in H1 2024

China’s export performance has been a subject of considerable interest and analysis, particularly given its impressive growth trajectory over recent years. Between 2019 and 2023, the value of China’s exports to the world rose by 35.2 percent, reaching a substantial US$3.38 trillion.

This upward trend extended into the first half of 2024, with exports increasing by 3.8 percent year-on-year in dollar terms, reaching a total of US$1.71 trillion. This period also saw China achieve a record monthly trade surplus of US$99 billion in June 2024, according to fDi Intelligence, underscoring its dominant position in global trade.

The table below represents the total trade breakdown of January to June 2024.

The breadth of China’s export growth is also reflected in the increase of exports to 202 out of 233 countries and regions from the first half of 2019 to the first half of 2024. This expansion highlights China’s strategic efforts to diversify its trade relationships and bolster its economic influence worldwide. Despite a 4.6 percent decline in the absolute value of exports in 2023, the three-year moving average of Chinese exports reached a record high of US$3.41 trillion for the 2021-2023 period, further cementing China’s pivotal role in the global economy.

However, this rapid expansion and the accompanying trade surplus, which remained above US$822 billion in 2023, have not been without controversy. The substantial trade imbalances have raised concerns among foreign policymakers about the impact on domestic industries and employment.

In response, major export markets, including the US, EU, India, Brazil, and Turkey, have notably implemented new tariffs and trade restrictions, particularly targeting sectors where China has a competitive edge, such as electric vehicles (EVs) and other clean technologies.

Who are China’s major trade partners?

China’s trade dynamics in the first half of 2024 reveal that engagement with ASEAN and Latin America has seen significant growth, while trade with the EU, the US, Japan, and Australia have weakened.

Trade with ASEAN countries increased by 7.1 percent year-on-year, reaching US$472.45 billion, with Vietnam leading the charge at a remarkable 20.6 percent growth. Latin American trade with China grew by 7.4 percent year-on-year, totaling US$252 billion, driven by a robust 11.3 percent rise in exports.

Trade within the Regional Comprehensive Economic Partnership (RCEP) countries also experienced growth, though at a slower pace compared to overall foreign trade. From January to June 2024, trade with RCEP members reached US$899.36 billion, up by 1.59 percent. Exports to these countries rose by 2.52 percent year-on-year to US$470.25 billion.

Western economies showed declines. China’s trade with the EU dropped by 3.7 percent to US$382.39 billion, with exports falling by 2.6 percent and imports by 5.7 percent. Trade with the US remained relatively stable at US$322.63 billion, a slight yearly decrease of 0.2 percent, with exports up by just 1.5.

Similarly, trade with Japan and Australia both saw declines—Japan by 5.1 percent to US$148.59 billion, and Australia by 5.1 percent to US$109.60 billion, with reductions in both exports and imports in each case.

Fast-growing export markets

China’s export growth has been remarkably broad-based, with increases reported in 199 out of 235 countries and regions. Analyzing the data from major export markets reveals significant trends and shifts.

One of the standout performers has been Zimbabwe, which saw its imports from China soar from US$368.8 million in 2019 to US$1.4 billion in 2023. This threefold increase underscores China’s strategic expansion into African markets. Similarly, the Republic of Congo experienced a significant rise in Chinese imports, from US$435 million to US$1.49 billion over the same period. These figures highlight China’s focused efforts to strengthen trade relations with African nations, facilitated by investments and development aid.

In Europe, Belarus emerged as a notable market despite facing EU sanctions following its 2020 presidential election. Chinese exports to Belarus grew by 225 percent to US$5.87 billion between 2019 and 2023. This substantial increase reflects the dynamic nature of China’s trade strategies, where economic and geopolitical considerations often intertwine. Countries like Serbia and Uzbekistan also reported considerable growth in Chinese imports, benefiting from China’s Foreign Direct Investment (FDI) and infrastructure projects under the BRI. Turkey, with its strategic position linking Europe and Asia, has similarly seen a boost in Chinese imports, further illustrating the broadening scope of China’s export destinations.

North America remains a crucial market for Chinese exports, with the United States leading in import volumes. The demand for Chinese consumer electronics, machinery, and textiles continues to be strong, despite ongoing trade tensions and regulatory challenges. This shows the deep interdependencies and integrated supply chains between the two economies.

In the Asia-Pacific region, Japan and South Korea remains significant buyers of Chinese goods. The regional supply chain integration and trade agreements like the RCEP have facilitated smoother trade flows, enhancing China’s export performance in these markets.

The diversification of China’s export markets is not just a response to geopolitical tensions but also a strategic move to mitigate risks and tap into new growth opportunities. China’s ability to adapt to changing global dynamics and its proactive trade policies have allowed it to expand its reach, even in non-traditional markets.

Which industries contribute the most to the export surge?

The export data for the first half of 2024 reveal significant trends in China’s trade performance. The export of agricultural products saw a modest increase of 2.0 percent year-on-year. The export of refined oil experienced a slight decline of 4.1 percent compared to the first half of the previous year. Interestingly, rare earths saw a substantial decrease in value by 43.2 percent despite a 10.9 percent increase in quantity, indicating a potential drop in global prices.

In the realm of manufactured goods and technology, China’s export of plastic products increased by 8.3 percent year-on-year, and furniture exports surged by 14.8 percent year-on-year, reflecting strong global demand. The machine and electrical products sector, which includes key exports like automatic data processing equipment and integrated circuits, showed a 4.9 percent overall increase year-on-year. Within this category, exports of integrated circuits jumped by 21.6 percent in value, indicating a robust semiconductor industry performance.

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Automobile exports, including chassis, increased by 18.9 percent, while ship exports saw an impressive 85.2 percent growth in value, reflecting a strong recovery in global shipping demand. High-tech products overall saw a 3.1 percent increase, underscoring China’s continued strength in advanced manufacturing sectors. Overall, China’s export landscape in 2024 showcases a diverse array of industries that contribute significantly to its global trade dominance.

In the following sections we present a detailed breakdown of the major sectors driving this growth.

Technology and electronics

China continues to dominate the global electronics market, with technology and electronics remaining at the forefront of its export economy. The integrated circuit manufacturing industry stands out, with exports projected to reach US$177.7 billion in 2024. This sector benefits from China’s position as the largest and fastest-growing integrated circuit market, supported by robust demand from industrial equipment, communication networks, and new energy vehicles.

Mobile phone and smartphone manufacturing are also key contributors, with exports valued at US$162.9 billion and US$125.5 billion, respectively. The rapid development of 4G and 5G technologies has fueled demand, although the market’s expansion has slowed due to saturation.

Furthermore, computer manufacturing, including peripherals, is another critical export area, collectively contributing over US$196 billion. Despite challenges like falling foreign demand and intense competition, China’s role as a global production base remains solid.

Automotive and machinery

The automotive sector has seen substantial growth, particularly in the export of EVs. Companies like BYD have surpassed international competitors, reflecting China’s advancements in this area. Additionally, the steel rolling industry, which supports automotive manufacturing, has exports estimated at US$59.3 billion. This sector has faced supply surplus issues but remains vital due to rising demand for high-quality steel products from downstream industries.

The industrial machinery sector, although not explicitly listed among the top exporters, plays a crucial role in supporting these industries through the supply of essential components and equipment.

Consumer goods

China’s consumer goods sector, particularly textiles, apparel, and home appliances, continues to be a significant export contributor. The footwear manufacturing industry alone is projected to export US$66.7 billion in 2024, highlighting China’s longstanding role as a major global supplier.

However, this industry faces challenges from intense international competition and the shifting of manufacturing bases to Southeast Asia. Despite these hurdles, the demand for Chinese consumer goods remains robust, driven by competitive pricing and a broad product portfolio.

Healthcare and pharmaceuticals

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The healthcare and pharmaceutical sector is another key area of growth for Chinese exports. Pharmaceutical raw material manufacturing is projected to reach US$65.4 billion in exports for 2024. China is a leading producer of essential pharmaceutical ingredients, such as vitamin C, citric acid, and penicillin. The COVID-19 pandemic significantly boosted global demand for these products, and hghlighted China’s pivotal role in the global pharmaceutical supply chain.

Additionally, the software development industry, which supports healthcare through the development of medical software and applications, is expected to contribute US$56 billion in exports.

Which Chinese provinces are exporting the most?

In the first half of this year, China’s export performance by province revealed significant regional contributions and variances in growth rates. Among the provinces, 22 saw year-on-year growth in their trade volumes, with 11 achieving double-digit growth.

In discussing the export data of Chinese provinces for the first half of 2024, this section employs RMB (Renminbi) terms rather than US dollar terms due to data availability.

Guangdong: The leading export powerhouse

Guangdong, China’s foremost export province, continued to lead with remarkable performance. Its total trade value reached RMB 4.37 trillion (US$ 601.73 billion), marking a significant 13.8 percent increase compared to the same period last year. This robust growth underscores Guangdong’s crucial role in the national trade landscape.

Several factors contributed to Guangdong’s stellar export performance:

• Increased demand: The global economic recovery post-pandemic has fueled heightened demand for Guangdong’s products.
• Competitive edge: The province has enhanced its international competitiveness. Notably, exports of ships surged by 70.7 percent, electric passenger vehicles by 78.3 percent, and containers by a staggering 104
• New trade dynamics: Guangdong has also seen rapid growth in new trade sectors. For example, electric vehicles and cross-border e-commerce have emerged as significant contributors to its export success.
• Private sector growth: The vitality of Guangdong’s private enterprises has been a major driver, with private sector exports growing by 21.3 percent.

Zhejiang: Consistent growth amidst changing dynamics

Zhejiang province also demonstrated strong performance, with its total trade value reaching RMB 2.56 trillion (US$352.50), a 7.8 percent increase year-on-year. The province’s export value alone climbed by 8.6 percent to RMB 1.90 trillion (US$261.62 billion).

Key aspects of Zhejiang’s export growth include:

• Sectoral strength: Zhejiang’s export growth was driven by significant increases in high-value products such as ships (up 93.7 percent) and automatic data processing equipment (up 43.1 percent).
• Market expansion: The province has been actively expanding into new markets and adapting to global demand shifts, which has helped sustain its export growth.

Yangtze River Delta (YRD) region: Synergistic growth

The Yangtze River Delta  (YRD) region, comprising Shanghai, Jiangsu, Zhejiang, and Anhui, achieved a combined trade value of RMB 7.74 (US$1.06 trillion), marking a historical high. This region’s exports grew by 5.9 percent year-on-year, accounting for 36.6 percent of the national total.

Factors contributing to the YRD’s performance include:

• Infrastructure and industry: The region benefits from its advanced infrastructure, comprehensive manufacturing capabilities, and strong innovation ecosystems.
• Policy support: Effective regional policies and favorable business environments have further bolstered trade performance.

Rising stars in Central and Western China

The performance of several central and western provinces has been noteworthy. Provinces like Xinjiang, Shanxi, and Tibet have seen impressive growth rates. For example:

• Xinjiang: Its total trade value grew by 48.4 percent, with exports up 51.4 percent and imports up 32.6 percent.
• Tibet: Recorded an astounding 132.4 percent growth in trade value, driven by both imports and exports.

These regions’ rapid growth reflects the broader trend of increasing economic activity and trade integration in China’s less developed areas.

The role of private enterprises

Across the board, private enterprises have emerged as pivotal players in driving export growth. In Guangdong, private firms accounted for 64 percent of the province’s total exports. Similarly, Zhejiang and Shandong have seen significant contributions from private businesses. This trend highlights the growing influence of the private sector in China’s trade dynamics, fueled by improved business environments and strategic international engagements.

Factors contributing to China’s strong export performance and future outlook

China’s robust export performance in recent years can be attributed to a combination of strategic economic policies, advancements in manufacturing, and flexibility to navigate global economic challenges. A significant factor is China’s move up the value chain, with its increased focus on producing high-value goods such as EVs and advanced electronics. Notably, Chinese carmakers are outperforming global competitors, making significant inroads into international markets.

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However, this optimistic view is tempered by several underlying challenges. Persistent deflationary pressures have indeed made Chinese goods more affordable, thus boosting exports, but this has also dragged down their overall value. Domestically, China faces substantial economic pressures, including a property sector crisis and weakening internal demand, which pose major risks to sustained growth. Additionally, geopolitical tensions and trade curbs, particularly from prominent markets like the US, EU, and India, have created a volatile trade environment.

These nations have implemented tariffs and restrictions on Chinese goods, particularly in sectors where China is gaining competitive advantages, such as clean technology.

China’s strategic investments in enhancing its value chain and the strong performance of key sectors have bolstered its export capacity. Yet, the longer-term outlook remains cautious. The diversification of global supply chains amid heightened geopolitical tensions, coupled with declining demand from key economic partners, suggests that external demand may not be a reliable growth engine. This balanced perspective underscores the complexity of China’s export dynamics, where impressive gains coexist with significant challenges and uncertainties.

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