Trade & Exports

Latest documents confirm China's export engine is running at high volume with a near-record goods surplus, while the product mix moves up the value chain. The most consequential new signal is from Washington: Treasury Secretary Bessent told the G20 in Asheville on August 30 that China's massive trade surplus is unsustainable and that countries hit by Chinese exports need to re-examine trade terms—yet he also said the US-China trade situation is improving as China's surplus falls and the two sides will press on with limited tariff-reduction talks ¹. That is a shallow truce: pressure continues in multilateral forums even as a narrow bilateral channel stays open.

The deepest new evidence of value-chain upgrading comes from Liaoning, a rustbelt province repositioning as a shipbuilder. In Jan–Jul 2026, provincial goods trade reached 4604.3bn yuan, a record, with exports up 12.2% in yuan terms. Machinery and electronics made up 53.3% of exports (+2.9 pp YoY), ship exports grew 1.78 times, and industrial robots jumped 164.2% ². Hengli Heavy Industry won two more VLCC orders from Greece's Danaos (20 total) and a first contract with Italy's Pemont for two LRII product tankers—entry into the southern-European high-end ship market ². This is the "smile curve" shift: growth is increasingly driven by products where Chinese firms control design, core components and after-sales, not just assembly.

Green mobility shows the same pattern in Jiangsu. Jan–Jul electric motorcycle/bicycle exports rose 38.8% and electric passenger cars 3.8%; Taicang port cleared about 790,000 vehicles (+80% YoY), including about 480,000 new-energy vehicles (+102%) ³. The form is changing too: a 38-train hydrogen-energy smart rail project in Kuching, Malaysia is being commissioned as a system, not just rolling stock, and Wujin Bonded Zone uses the bonded channel to halve the VAT-refund cycle ³. Shandong shipped articulated CNG buses to Cartagena, Colombia, on August 29 ⁴. Cumulatively, green-mobility exports are expanding in both value-added and geographic scope.

Macro conditions are consistent with resilient external demand. The August manufacturing PMI rose 0.6 points to 49.8, still below the expansion line, but the new-orders sub-index moved above it to 50.6 (+2.1) and production rose to 50.4 ⁵. The recovery is uneven—small firms are at 47.9 and employment fell to 48.7—so domestic demand is not yet carrying the economy. But the export order book appears to be holding, even as the headline gauge signals China cannot rely on trade alone.

The risk side is accreting. On August 31 the US Federal Register carried final affirmative anti-dumping and countervailing determinations on van-type trailers and subassemblies from China, keeping the trade-remedy machinery active ^6,7. Bessent's G20 framing explicitly targets China's surplus, and US voices are trying to drag Beijing into the US–Canada trade dispute even though Chinese analysts correctly note Ottawa's diversification is a response to Washington's protectionism ⁸. The multilateral layer is where pressure is building faster than the bilateral tariff track.

Diversification continues to deliver real though incremental results. Jiangsu's "Brand Products Silk Road" platform generated $150mn in intended deals at the Almaty expo (+25% YoY) and over $30mn at the Kenya power expo ⁹. Hainan's zero-tariff coverage has expanded from 21% to 74% of tariff lines (6,600+ products) since island-wide customs closure ¹⁰, and Zhengzhou Xinzheng Comprehensive Bonded Zone's Jan–Jul trade hit 288.3bn yuan, +33.7% YoY, third nationally ¹¹. The SCO/Global Development Initiative framework adds diplomatic weight ¹². Domestic policy, however, still tilts toward consumption subsidies rather than import absorption; Jiangsu's expanded trade-in categories now include humanoid robots and drones with a 15% government rebate, which stimulates domestic spending, not imports ¹³. A Hong Kong Economic and Trade Office push in Sicily for wine trade and academic exchange is a minor reminder that Hong Kong continues to serve as a soft-power trade conduit ¹⁴.

Outlook: high export volumes and a large surplus persist, the product mix is upgrading, and non-US diversification is broadening into Latin America and Southeast Asia. The principal risk remains the accretion of barriers—bilateral US remedies now compounded by G20-level imbalance debate—with the next real tests being full-year 2026 destination data and the G20 communiqué.