China’s export growth unexpectedly accelerated last month in the fastest gain since April, as demand from around the world compensated for the continued slump in shipments to the US.
Total exports rose 7.2 per cent in July from a year earlier to $322 billion, a surprise to most economists who had expected a slowdown from June’s increase of 5.8 per cent.
Data released Thursday by the customs authorities showed the pickup was driven by strong growth in shipments to the European Union, Southeast Asia, Australia, Hong Kong and other markets, which more than made up for the fourth month of double-digit declines in US purchases.
“What really supported China’s stronger-than-expected overseas shipments in the past three months was exports to non-US markets,” said Jacqueline Rong, chief China economist at BNP Paribas SA.
The resilience in overseas shipments comes despite the high tariffs imposed by the US, showing that global demand for Chinese goods remains strong and still provides a significant driver for the domestic economy.
Beijing and Washington face an Aug. 12 deadline to prolong their 90-day tariff truce. While the Chinese side said the two nations agreed to extend it after talks in Sweden last month, US officials have made clear President Donald Trump will make the final call on maintaining the agreement.
What Bloomberg Economics Says…
“The July reading supports our view that exports may stay broadly resilient despite weaker trade with the US. The key risk hinges on whether and how other countries may tighten controls on transshipments under their trade deals with the US.”
— Eric Zhu. For full analysis, click here
An improvement in demand outside the US has meant the value of exports so far in 2025 is well above any previous year and would reach almost $3.8 trillion at the current pace. But some economists expect a slowdown in the second half of the year as companies try to sell off their increased inventories.
China’s currency is also providing a boost to exports. The yuan rebounded a little from July but is still weaker than it’s been for years against a basket of its peers.
“While some of the sales to the Asean countries was suspected to be linked to re-routing, exports to Latin America and Africa that were less likely to be associated with transshipments were even more robust,” Rong said. “Chinese goods are very competitive, and in recent months the yuan actually depreciated against non-US currencies, which helped exports as well.”
China has also increasingly relied on third countries for the manufacturing of final products or components, a trend that accelerated following Trump’s first trade war and his imposition of higher restrictions on the world’s second-largest economy.
China’s share of total value-added manufacturing of goods destined for the US through countries including Vietnam and Mexico surged to 22 per cent in 2023 from 14 per cent in 2017, according to Bloomberg Economics.
Shipments to the US fell 22 per cent from a year earlier after slumping just over 16 per cent in June. Chinese firms were able to increase their sales in other markets to compensate for the drop to the US, with exports to the EU rising 9.3 per cent and growing almost 17 per cent to the 10 Southeast Asian nations in the Asean group.
Imports climbed 4.1 per cent, with the volume of purchases of integrated circuits rising to a four-year high. China’s exports of chips were also strong, showing the effects of a strong global semiconductor sector and the boom in the development of artificial intelligence, according to Rong.
Exports of ships fell for the first time in five months, while vehicle sales abroad continue their strong growth, rising almost 19% by value in July. Shipments of machines and high-tech products also grew, with sales of rare earths overseas down for a sixth month.
Chinese imports of key commodities held up in July, with copper, iron ore, soybeans and crude oil all posting year-on-year gains.
BNP’s Rong cautioned, however, that China’s stronger-than-expected import growth may not last, noting that the yearslong property market slump deepened last month.
High-frequency data indicates that trade activity is already slowing, with Chinese ports processing fewer containers in the seven days through Aug. 3 than the previous period, the second straight week of declines.
Overall, China’s trade surplus was $98.2 billion, lower than in June but still well above the historical average. Should this trend hold up, it will be well above $1 trillion in 2025, providing much needed support to an economy in deflation and still facing weak domestic demand.
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Published on August 7, 2025
