In 2024, China witnessed extraordinary export growth, achieving a record $3.5 trillion, with notable gains in high-tech sectors like integrated circuits and automobiles. This surge played a pivotal role in offsetting domestic economic weaknesses and bolstering global trade.
Major Trends Driving China’s Export Success
- Sectoral Growth: Vehicle exports rose by 39% year-on-year, with Russia emerging as the largest market. New Energy Vehicles (NEVs) saw a 25% increase despite new EU tariffs.
- Geopolitical Shifts: Increased demand from emerging markets like India and Africa balanced declines in exports to developed regions.
- Currency Impact: The yuan’s 15% decline since 2021 boosted export competitiveness but raised concerns about long-term sustainability.
Economic Impacts and Global Trade
Exports now account for 20% of China’s GDP, with a trade surplus nearing $1 trillion. However, import volumes grew only by 2%, signaling a growing trade imbalance. China’s dominance in supply chains for EVs and batteries highlights its one-sided trade approach.
Challenges and Future Outlook
China’s reliance on export-driven growth faces hurdles, including trade tensions and insufficient fiscal support for domestic demand. Speculation about a potential Trump-Xi agreement to appreciate the yuan may affect trade balances, while ongoing investments in technology and emerging sectors strengthen China’s competitive edge.