China Merchants Securities (CMSC) has released a research report projecting that China's export growth rate is expected to remain around 5% in 2026. Regarding the "carryover effect," the non-recurring factors supporting exports at the end of 2025 are anticipated to diminish. However, from a medium-term perspective, multiple factors are expected to help China's exports maintain resilience amidst challenges. A comprehensive assessment suggests that China's exports are likely to achieve moderate growth of approximately 5% in 2026 within a complex environment: this pace will neither replicate the double-digit rapid expansion seen in previous years, but will continue to demonstrate relatively strong risk resistance. The main viewpoints of CMSC are as follows:
Overall, the export growth rate continued its recovery trend in December, with full-year export performance significantly outpacing imports, primarily driven by the following factors: 1) An easing trade environment has boosted confidence. The series of trade "truce" consensuses reached during the Sino-US leaders' meeting in late October have led to a marginal alleviation of tariff pressures, reducing transaction costs and uncertainty premiums for importers and exporters. Specifically, order growth for tariff-sensitive machinery, electronics, and intermediate goods remained high, with the tangible benefits of tariff reductions gradually materializing. 2) A transformation in the export structure is underway, shifting between "old and new drivers." The results of the domestic manufacturing industry's transformation and upgrading are becoming apparent, with exports of high-value-added products like integrated circuits, automobiles, and ships experiencing rapid growth, becoming the mainstay supporting the overall export volume. Concurrently, exports of traditional labor-intensive products such as textiles, garments, luggage, and toys declined sharply. The robust growth of emerging products has effectively offset the weakness in traditional product exports.
3) The market diversification strategy has proven effective. China's foreign trade markets became more diversified in 2025. Against the backdrop of a ninth consecutive month of double-digit decline in exports to the US (exports to the US still fell sharply by about 30% year-on-year in December, indicating a substantial drop), China's exports to markets such as the EU and Belt and Road Initiative partner countries remained relatively strong. Exports to ASEAN maintained growth (total import and export volume with ASEAN increased by about 8% for the full year), effectively cushioning the impact of the US market downturn. Export Product Structure: The upgrading trend is evident, with a continued divergence in growth rates between "new quality productive forces" products and traditional labor-intensive products. 1) Integrated circuit exports surged, increasing by over 40% year-on-year in December (marking the ninth consecutive month with growth exceeding 20%), with the full-year cumulative growth rate also surpassing 20%. As the trade "truce" led to a marginal easing of semiconductor restrictions, liquidity in the related industrial chain improved, and enterprises seized the window period for global stockpiling.
2) Automobile export growth accelerated significantly again, rising by approximately 71% year-on-year in December, notably exceeding the high growth rate of about 53% from the previous month. On one hand, the cost and technological advantages of new energy vehicles have translated into strong product competitiveness; on the other hand, ahead of the final tariff implementation from the EU's anti-subsidy investigation into Chinese electric vehicles, automakers engaged in "front-loading exports" targeting the European market, accelerating year-end shipments to Europe to mitigate the impact of potential future tariffs. 3) Ship exports continued their rapid growth, leading major categories for several consecutive months (the full-year export volume growth rate for ships was 16.2%). The global commercial fleet is currently entering an aging renewal cycle, and China's shipbuilding industry, leveraging its substantial capacity and technological advancements, is securing a large number of high-value-added orders. 4) Exports of traditional labor-intensive products remained weak. Similar to previous months, exports of traditional categories such as textiles, garments, footwear, hats, and luggage remained sluggish in December, with weak external demand continuing to drag on export growth for China's traditional manufacturing sector.
Export Destinations: The drag from the US market remains most pronounced, while markets such as Europe, Africa, and ASEAN demonstrated relative strength. 1) The decline in exports to the US persisted. China's exports to the US fell by approximately 30% year-on-year in December, marking the ninth consecutive month of double-digit decline, leading to a full-year drop of about 20% in exports to the US. This primarily reflects the lagged effects of previous "front-loading exports" and high tariffs, as well as cautious purchasing by US importers during inventory adjustment periods. Some of the actual end-demand from the US for Chinese goods is reflected in intermediate goods exports to other trade-benefiting regions, or is compensated through third-party transshipments, offsetting the decline in direct exports to the US. 2) Similar to the previous month, export growth to the European market remained above 10%. The European economy showed marginal stabilization in the fourth quarter, and European retailers entered the peak season for stocking up for Christmas and the New Year, boosting demand for consumer goods imports. This was compounded by the conclusion of the transition period for the EU's Carbon Border Adjustment Mechanism (CBAM) on December 31, 2025. To reduce costs before the new regulations took effect, EU importers and Chinese exporters concentrated "rush shipments" of related high-carbon products and their downstream manufactured goods during November and December.
3) ASEAN maintained its position as the largest trading partner, and export growth to Africa remained high. China's exports to ASEAN continued to achieve medium-to-high growth year-on-year in December (up 11.15% month-on-month), solidifying ASEAN's contribution to China's foreign trade. Since March 2025, China's export growth to Africa has consistently remained in double digits, becoming a significant force behind this year's strong export growth. Imports: Have maintained positive growth for seven consecutive months. Although international commodity prices generally declined throughout the year, the import volume of China's major commodities steadily increased, characterized by "volume growth and price reduction": import volumes of bulk commodities like iron ore and crude oil increased significantly, but their average prices fell year-on-year. While steel mill profits were thin, demand for restocking at low prices persisted. China's soybean import volume still saw slight year-on-year growth in December, becoming one of the key drivers supporting import growth. Furthermore, driven by the artificial intelligence boom, imports of intermediate goods in China's high-tech sectors were also relatively active; for instance, imports of computer components grew by about 20% for the full year, indicating strong domestic demand for key components amid industrial upgrading. On the domestic demand side, the implementation of policies aimed stabilizing growth and expanding domestic demand also spurred a recovery in imports of some consumer goods and production materials.
Risk提示：Uncertainty surrounding tariff policies in Europe and the US remains significant.
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