SCIO briefing on China's economic performance in July 2025

Market News International:

This week, China and the U.S. agreed to extend their escalatory tariff truce by a further 90 days. How does this impact China's export performance over the remaining months of the year? What is your view that the possibility that the front-loading effect seen earlier in the year will weaken export performance in the second half? And, what will be the source of export growth in the months ahead?

Fu Linghui:

Thank you for your questions. Since the beginning of this year, despite a rapidly changing trade environment and a significant increase in uncertainties and instabilities, China's imports and exports of goods have continued to grow, showing strong resilience and vitality. In July, China's total value of imports and exports of goods grew by 6.7% year on year, accelerating by 1.5 percentage points from the previous month. The value of goods exports increased by 8% year on year, accelerating by 0.8 percentage point from the previous month and marking the second consecutive month of acceleration. As exports continue their rapid growth, China's imports are also steadily rebounding. In July, the value of goods imports increased by 4.8% year on year, accelerating by 2.4 percentage points from the previous month, marking the second consecutive month of expansion. This rise is conducive to expanding global market demand and injecting Chinese strength into the global economic recovery. The strong resilience of China's goods imports and exports can be attributed to its unwavering commitment to high-level opening up and diversification of foreign trade partners, coupled with industrial optimization and upgrading, enhanced market competitiveness and the joint efforts of stabilizing foreign trade policies to create a good environment for foreign trade enterprises. Looking ahead to the second half of the year, China's export growth is still supported by a number of favorable conditions.

First, the strategy of foreign trade diversification is continuing to yield positive results. Affected by high tariffs, China's exports to the United States have declined. Nevertheless, China remains committed to expanding high-standard opening up and promoting trade exchanges with countries around the world on the basis of mutual benefit and win-win outcomes. Exports to traditional major trade partners and emerging trade partners have continued to grow. From January to July, China's exports to ASEAN, the EU, and Belt and Road partner countries increased by 14.8%, 8.2% and 11.7%, respectively. As China continues to deepen its economic and trade cooperation with countries around the world, the support of foreign trade diversification for exports will become increasingly evident.

Second, the competitiveness of export goods has been enhanced. Chinese enterprises have been actively improving their independent R&D capabilities, accelerating transformation, optimizing product structures, and upgrading technological content. Their international competitiveness has been continuously strengthened, which has also contributed to export growth. From January to July, China's exports of electromechanical products increased by 9.3% year on year, with exports of integrated circuits up 21.8%. Exports of high-tech products also performed well, growing by 7.2% during the same period.

Third, foreign trade enterprises have remained highly dynamic. Since the beginning of this year, in the face of external market fluctuations, a wide range of foreign trade enterprises, particularly private ones, have taken active and forward-looking steps under the support of various policies promoting private sector development. They have worked to consolidate existing markets and explore new ones, providing strong momentum for the growth of foreign trade. From January to July, exports by private enterprises increased by 8.7% year on year, outpacing the overall growth rate of goods exports. The adaptability and innovation of foreign trade entities have also created favorable conditions for expanding trade opportunities.

It should also be noted that local governments and relevant departments across the country have continued to intensify efforts to promote high-quality development of foreign trade, helping enterprises stabilize orders and expand markets. The positive effects of these policies will continue to emerge. The global economy remains weak and there are many unstable and uncertain factors in the external environment. This brings additional pressure on China's foreign trade and poses greater challenges to certain enterprises. In spite of this, our commitment to high-standard opening up remains unchanged. The country's comprehensive industrial system offers distinct advantages, foreign trade enterprises are actively adapting to changes, and the continued implementation of policies to stabilize foreign trade will keep supporting its steady and sound development. Thank you.