Trade & Exports

China's export engine is still running at high volume, but the risk profile is shifting: the geographic pivot to non-US markets is holding, while Washington's trade-remedy machinery is tightening faster than expected. The clearest anchor of diversification is Shanghai Cooperation Organization (SCO) trade: China's trade with other SCO members reached 8% of total foreign trade in 2025, up from $12.1 billion in 2001 to $523.5 billion, MOFCOM spokesperson Huang Ling said on Aug 27 ¹. That structural shift matters because Beijing is building an alternative trade architecture even as Washington keeps the surplus issue on the G20 agenda.

Within that architecture, value-chain upgrading is the dominant dynamic. Liaoning's Jan–Jul exports rose 12.2% to 2634.8 billion yuan, with machinery and electronics at 53.3% of exports; ship exports grew 1.78 times and industrial robots 164.2% ². Hengli Heavy Industry's two additional VLCC orders from Greece's Danaos (20 total) and its first contract with Italy's Pemont for two LRII product tankers mark entry into the southern-European high-end shipbuilding market ². The 'smile curve' shift—from assembly to design and core components—is now measurable in export data.

Diversification vectors are multiplying at the sub-national level. Zhejiang's trade with other SCO members hit a record 292.03 billion yuan in Jan–Jul (+9.8%), with imports up 20.2% and mechanical/electrical products at 52.7% of exports ³. CCPIT is expanding SCO business matchmaking and commercial legal services; six SCO member states exhibited at the fourth China International Supply Chain Expo ⁴. Liaoning's third export fair in Ulaanbaatar, Mongolia, signed a $4 million steel-structure order for Zhongwei Group ⁵, and the 30th Shandong-Taiwan trade fair in Weifang deepened cross-strait industrial integration ⁶. Macao's Singapore roadshow produced 74 signed projects ⁷. These sub-national ties are the granular layer of Beijing's diversification strategy, and they are thickening.

A new frontier is digital trade. The fifth Global Digital Trade Expo will run September 23–27 in Hangzhou, showcasing quantum computing, brain-computer interfaces, eVTOL aircraft and AI-powered trade tools ⁸. Green mobility exports continue to deepen: Shandong shipped articulated CNG buses to Cartagena, Colombia on Aug 29 ⁹. The expo is a test of whether digital services can become a measurable export category, not just a hardware story.

The domestic-demand constraint remains the brake on any near-term 'dual circulation' rebalancing. The August manufacturing PMI rose 0.6 points to 49.8, with new orders at 50.6, but small firms remain at 47.9 and employment fell to 48.7 ¹⁰. A new MOFCOM-led implementation opinion on expanding commodity consumption targets 60 trillion yuan of retail sales by 2030 and ten-trillion-yuan green/smart/health consumer markets ¹¹—but that is a domestic-market program, and its effects on import demand will take years to materialize.

Risk accumulation continues on the trade-remedy track, and now with sharper teeth. On Sep 1 the US Federal Register published a fresh batch of actions: initiation of a circumvention inquiry on certain alkyl phosphate esters from China ¹², final results of an expedited third sunset review that keeps the antidumping order on steel grating in place ¹³, and institution of five-year reviews of antidumping and countervailing duty orders on polyethylene retail carrier bags ¹⁴. Treasury Secretary Bessent is pushing the G20 to treat China's surplus as systemic ¹⁵. Russia remains the alternative anchor: Vice Premier Ding Xuexiang will attend the Eastern Economic Forum on September 2–4, with the 13th China-Russia investment cooperation committee and 23rd energy cooperation committee meetings scheduled ¹⁶.

Outlook: high export volumes and a large surplus persist, value-chain upgrading continues, and non-US diversification is broadening—but the accumulation of trade remedies and the G20-level imbalance debate are the principal risks. The next tests are full-year 2026 destination data, the G20 communiqué, and whether the Digital Trade Expo converts into signed cross-border services contracts.