China's foreign trade performance in August demonstrated continued resilience, with exports maintaining robust double-digit growth while the composition of both exports and imports became increasingly concentrated in specific sectors and markets. According to data released by the General Administration of Customs on September 8, August exports reached $401.4 billion, representing a year-on-year increase of 25% (up from 23.9% in the previous month), with a month-on-month growth rate of 0.9% compared to the five-year average of 0.6% for the same period. Imports totaled $282.4 billion, growing 28.2% year-on-year (up from 27.6% previously), with a month-on-month decline of 1.1% versus the five-year average increase of 2.4%. The trade surplus expanded to $119.09 billion, up from $112.3 billion in the prior month.
The slight acceleration in export growth was supported by several key factors. First, the global manufacturing PMI improved to 52.3% (from 52.1%), which correspondingly lifted China's new export orders PMI by 0.5 percentage points to 50.1%, returning to expansion territory. The AI industry remains in an exceptionally high prosperity phase, with the Philadelphia Semiconductor Index edging up 2% (after a 20.6% decline the prior month), South Korea's semiconductor exports surging 198.8% year-on-year in the first 20 days, and Vietnam's semiconductor-related product exports growing 56.4%. These conditions propelled China's integrated circuit exports to grow 129.8% and automatic data processing equipment exports to rise 76.5%, with these two categories alone contributing 11.3 percentage points to overall export growth, accounting for 45% of the total growth share.
The new energy vehicle sector maintained its strong export momentum, with automobile export values growing 43% year-on-year in August, contributing 1.8 percentage points to overall export growth. According to the China Passenger Car Association, July passenger vehicle exports grew 87.8% year-on-year, with new energy passenger vehicles surging 147.8% and representing 58.8% of total passenger vehicle exports, up 14 percentage points from the same period last year. Domestic brand exports contributed the primary increment with 87% growth, as cost advantages continue to translate into overseas market share gains.
Price factors also provided meaningful support to export growth. The PPI turned positive in March at 0.5% (the first positive reading in 41 months), accelerating to 4.1% and 3.5% in June and July respectively. This drove the export price index's contribution to export growth up to 11.9% in July, with August PPI expected to remain elevated. This price cushion has been critical in preventing sharper export declines despite typhoon disruptions in July and August. Additionally, the lower base effect from August of the previous year (4.2% export growth versus 7% in July) contributed to the modest improvement in this year's August reading.
Import growth accelerated to 28.2% in August, with monthly import values exceeding $280 billion for three consecutive months, maintaining the strong growth trajectory seen since the beginning of the year. AI-related imports continue to climb, with integrated circuit imports growing 83.6% and automatic data processing equipment imports surging 209.1%, contributing 13.6 and 6.1 percentage points respectively and accounting for 70% of total import growth. Strategic and energy security-related industrial goods also showed some recovery, with copper ore, copper products, grain, and iron ore imports growing 24.7%, 28.5%, 13.1%, and 6.23% respectively, coinciding with the manufacturing PMI improving to 49.8% from 49.2%. The lower base from August last year (1.7% import growth versus 4.3% in July) also provided support to the reading.
Regional export dynamics reveal shifting patterns
Exports to ASEAN moderated slightly to 30.2% growth (from 38.4%), with ASEAN's manufacturing PMI easing to 52.3% from 52.8% while remaining in expansion territory. Vietnam's export growth remained robust at 26.3%, corresponding to China's double-digit export growth to Vietnam of 33%. Exports to the United States accelerated notably to 34.4% growth (from 17.1%), marking the second consecutive month of acceleration. With the National Day golden week approaching, merchants have advanced their shipment schedules, while expectations of potential additional 7.5% tariffs on Chinese goods by the U.S. government have spurred front-loading of exports. The Ningbo container freight index shows U.S. West Coast routes rising 17% month-on-month and East Coast routes climbing 12.7% in August.
Exports to Europe decelerated to 6.6% growth (from 16%), marking the slowest pace in the past ten months. The air conditioning demand surge triggered by Europe's June heatwave (72.8% year-on-year growth in that month) transitioned to peak sales in July and channel inventory clearance in August, with seasonal urgent orders fully unwinding. This was compounded by a high base from August of the previous year when exports to Europe were stronger than usual. Market attention should focus on the October 15 EU leaders' summit, November member state tariff voting, and progress on price commitment implementation.
Africa-bound exports rebounded to 30.9% growth (from 18.2%), though this largely reflects base effects. Exports to Hong Kong accelerated to 63.7% growth (from 48.8%), contributing 5.4 percentage points to overall export growth. Exports to Japan moderated to 8.2% (from 14%), while exports to South Korea maintained strong growth at 49.3%, corresponding to Korea's 68.7% export growth. Exports to Russia improved to 38.7% (from 34.9%), with Latin America at 17.5% and India recovering to 16.9%.
Product category breakdown shows mixed performance
High-tech product exports grew 56.9% (up from 52.7%), while labor-intensive product exports rose to 10.3% (from 8.4%), and electromechanical product exports moderated slightly to 32.8% (from 33.9%). Within electromechanical products, integrated circuits surged 129.8%, home appliances accelerated to 10.8%, and mobile phones grew 29.6%. Automobile exports remained strong at 43% growth, though easing from the 60.4% pace in July. Auto parts grew 7.4% and general machinery equipment expanded 15.2%. The global AI industry's high prosperity continues to support integrated circuit exports maintaining above-60% monthly growth throughout this year, with August's 129.8% growth contributing 7.2 percentage points to overall export growth.
Labor-intensive product exports improved by nearly 2 percentage points, with luggage, clothing, footwear, furniture, and toys all showing varying degrees of recovery, while plastics and textiles experienced modest declines for the second consecutive month. The clean energy transition and new energy vehicle competitiveness continue to drive strong performance in transportation equipment exports.
Full-year outlook remains constructive with elevated resilience
We maintain our projection of double-digit export growth for the full year, with resilience persisting despite rising structural concentration. Several favorable factors support this view: first, despite typhoon disruptions in both July and August, orders have not been lost—the August new export orders PMI rose 0.5 percentage points to 50.1%, returning to expansion. September is likely to see reduced typhoon impact, allowing delayed shipments to be released and providing additional support. Second, the AI super-cycle remains in an upward phase, with Bloomberg consensus estimates indicating the four major cloud service providers (Amazon, Google, Microsoft, and Meta) will achieve approximately 21% compound annual growth in capital expenditures from 2025-2029, positioning China as a continued beneficiary as the global electronics supply chain hub. Third, the ongoing global green transition and improving competitiveness of machinery equipment should sustain high growth in new energy vehicles, ships, and other mechanical transport equipment.
Potential headwinds include the gradual unwinding of pre-holiday shipments and tariff-anticipating export demand, which may cause demand to moderate subsequently. Additionally, PPI growth has likely passed its peak for the year, suggesting the price contribution has reached its high point and support from this factor may weaken going forward.
Risk considerations
Key risks to monitor include potential weakness in external demand, the possibility of domestic economic growth decelerating more than expected, and intensifying trade frictions that could disrupt the current trajectory.