Customs data released on August 7 shows that in July, dollar-denominated exports reached $397.85 billion, a 23.9% year-on-year increase, compared to the prior month's 27.0% growth. Imports totaled $285.35 billion, rising 27.5% year-on-year, versus the previous month's 36.0% gain. The trade surplus for July stood at $112.5 billion, down from $125.62 billion in June.
July's strong export performance was driven by three key factors. First, robust demand from the AI industry continues. The global semiconductor sector remains highly active, boosting exports of Chinese integrated circuits and automatic data processing equipment. Second, the energy substitution effect, driven by new energy sources, is at play. China's rapid development in new energy has created a strong replacement capacity for oil and gas, leading to sustained high growth in new energy-related exports. Third, a low base effect from last year contributed to the figures; in July 2025, export growth was only 6.99%, a relatively low level for that period in the past five years.
The strong import performance in July was also supported by three main reasons. The high AI boom similarly boosted imports. At the commodity level, AI-related imports remained vigorous, with automatic data processing equipment, integrated circuits, high-tech products, and electromechanical products seeing year-on-year import growth of 193.8%, 71.1%, 58.8%, and 46.0%, respectively. Additionally, import prices generally stayed at elevated levels. Due to slow progress in Middle East conflicts, commodity prices have remained high, causing China's July import value of coal and copper ore to rise by 83.8% and 26.6% year-on-year, respectively. A low base effect also played a role; affected by US tariffs, the July 2025 import value was $223.8 billion, a low figure for that period in five years.
By region, ASEAN and the EU were the main pillars of support, while trade with the US continued to improve. In July, exports to ASEAN grew by 38.4% year-on-year, accounting for 19.0% of total exports, while imports from ASEAN increased by 36.0%, representing 15.0% of total imports. Exports to the EU grew by 16.0%, making up 14.6% of total exports, but imports from the EU turned negative at -1.4%, accounting for 8.5% of total imports. Exports to the US increased by 17.0% year-on-year, constituting 10.5% of total exports, while imports from the US grew by 15.3%, representing 4.9% of total imports.
By product category, exports of high-tech and electromechanical products maintained high growth rates, while exports of labor-intensive products saw a moderate recovery. In July, high-tech product exports grew by 52.7%, and electromechanical products rose by 33.8%. Within these categories, integrated circuit exports surged by 116.6%, and automatic data processing equipment exports increased by 67.4%. Automobile exports grew by 60.4%, with new energy vehicles performing particularly well amid energy shocks. Growth rates for exports of general machinery and ships accelerated to varying degrees, while exports of lighting fixtures turned from negative to positive. Among labor-intensive products, growth rates for exports of luggage, clothing, and furniture all accelerated to varying degrees. Exports of footwear turned from negative to positive, and the decline in toy exports narrowed. On the import side, automatic data processing equipment, high-tech products, and integrated circuits saw growth of 193.8%, 58.8%, and 71.1%, respectively, while imports of automobiles and medical instruments declined.
Looking ahead, we expect import and export growth rates to maintain resilience but moderate slightly. This resilience is supported by four main factors. First, the structural boom driven by AI technology is expected to continue, with semiconductors and related high-tech products providing support to trade data. Second, the impact of energy price increases from the US-Iran conflict may persist, potentially supporting trade growth from the price side. Third, China's abundant alternative energy sources and stable industrial production can help offset the negative impact of energy shocks on exports. Fourth, China is continuously promoting the diversification of its foreign trade markets. However, trade growth also faces downward pressure from two potential drag factors. One is the risk of trade frictions, which extends beyond US-China issues to include China-EU tensions. On the US front, on July 23, the US announced an additional 12.5% tariff under Section 301. On the EU front, Chinese goods and services such as tires, steel, aluminum, solar glass, hardwood plywood, cross-border e-commerce platforms, and agricultural products face increasing pressure from EU trade policies. The other factor is that the preemptive restocking demand globally, spurred by the US-Iran conflict and trade policy uncertainty in the first half of the year, has largely run its course. Market cargo volumes are expected to return to normal in the second half, diminishing the short-term boost from the inventory cycle on trade. Furthermore, it is important to note that trade dynamism is primarily supported by the AI industry chain, while demand for general goods related to the traditional economy remains weak. Boosting overall domestic demand will still require policy support.
Risk warnings: Risks of recurring geopolitical events, risks of overseas demand falling short of expectations, and risks of macroeconomic policies underperforming expectations.
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