CMSC: The export growth rate in 2026 may continue to maintain resilience. Overall, it is projected to maintain mild growth of around 5%.

CMSC released a research report stating that looking ahead to 2026, it is expected that China's export growth rate may still be maintained at around 5%. In terms of the "tailwinds" factor, the unusual factors supporting exports are expected to weaken by the end of 2025. However, multiple factors in the medium term will help China's exports maintain resilience in the face of challenges. In summary, China's exports are expected to maintain moderate growth of around 5% in a complex environment in 2026: it will not repeat the double-digit high-speed sprint of previous years, but will continue to demonstrate strong resilience against risks. The main points of view of CMSC are as follows: Overall, the export growth rate in December continued to rise, and the annual export performance was significantly better than imports, mainly driven by the following factors: 1) Trade environment easing boosts confidence. The end of October meeting between Chinese and US leaders reached a series of trade "ceasefire" agreements, followed by a gradual easing of tariff pressures. The costs and uncertainties for traders have been reduced, particularly for machinery, electronics, and intermediate product orders which are sensitive to tariffs, maintaining high growth rates. The substantial benefits of tariff reductions are gradually being realized. 2) Structural shift in export "new and old energies". The effects of China's manufacturing sector transformation and upgrading are evident, with high value-added products such as integrated circuits, automobiles, and ships experiencing rapid export growth, becoming the mainstay supporting overall export growth; at the same time, traditional labor-intensive products such as textiles, clothing, bags, and toys have seen a significant decline in exports. The strong growth of new products effectively offsets the weakness of traditional products. 3) Market diversification strategy is effective. China's foreign trade market in 2025 is more diversified. Against the backdrop of consecutive double-digit declines in exports to the US for the 9th month (December's exports to the US decreased by about 30% year-on-year, the decline is still significant), China's exports to the EU, countries participating in the Belt and Road Initiative, and other markets have remained relatively strong, with exports to ASEAN continuing to grow (annual imports and exports with ASEAN increased by about 8%), effectively offsetting the impact of the decline in the US market. Export commodity structure: Upgrading trend is evident, with the export growth rates of "new quality productivity" products and traditional labor-intensive products continuing to differentiate 1) Integrated circuit exports surged, with a year-on-year growth of over 40% in December (9th consecutive month of growth rate above 20%), with an annual cumulative growth rate of over 20%. With the marginal relaxation of semiconductor restrictions under the trade "ceasefire", improved liquidity in the related industry chain, companies are seizing the window to stock up globally. 2) Automobile exports rose sharply again, with a year-on-year growth of about 71% in December, significantly 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 been transformed into strong product competitiveness; on the other hand, before the EU's anti-subsidy investigation into Chinese electric vehicles leads to final tariffs, car companies have engaged in "export rush" behavior towards the European market at the year-end to avoid future tariff impacts. 3) Ship exports continue to grow rapidly, leading in major categories for several consecutive months (annual ship export growth rate is 16.2%). With the global commercial fleet entering an aging update cycle, China's shipbuilding industry, with its large capacity and technological progress, has undertaken a large number of high value-added orders. 4) Traditional labor-intensive products continue to show weakness in exports. Similar to previous months, exports of traditional products like textiles, apparel, hats, bags, and other categories remained sluggish in December, with weak external demand still dragging down the export growth of China's traditional manufacturing industry. Export destinations: US market drag remains prominent, while Europe, Africa, and ASEAN markets show relatively strong performance 1) Decline in exports to the US continues. In December, China's exports to the US decreased by about 30% year-on-year, maintaining a double-digit decline for the 9th consecutive month, resulting in a 20% year-on-year decline in exports to the US for the full year. This mainly reflects the lagging impact of the earlier "export rush" and high tariffs, as well as cautious purchasing by US importers during inventory adjustment periods. Some of China's actual end demand in the US is reflected in exports of intermediate products to other trade-benefitting regions, or is being offset through third-party transfers. 2) Similar to the previous month, export growth to the European market remains above 10%. In the fourth quarter, the European economy stabilized marginally, with European retailers entering the Christmas and New Year season of stocking up on goods, boosting import demand for consumer goods. In addition, the transitional period for the EU's Carbon Border Adjustment Mechanism (CBAM) ended on December 31, 2025. In order to lower costs before the new regulations take effect, EU importers and Chinese exporters concentrated on "hurriedly shipping" related high carbon products and downstream manufactured goods in November and December. 3) ASEAN remains China's largest trading partner, with continued high growth in exports to Africa. China's exports to ASEAN continued to achieve moderate to high growth year-on-year in December (11.15% year-on-year growth), solidifying ASEAN's contribution to China's foreign trade. Since March 25, China's exports to Africa have maintained double-digit growth, becoming an important force in maintaining strong export growth this year. Imports: Positive growth has been maintained for 7 consecutive months Although international commodity prices fell overall throughout the year, China's imports of major commodities steadily increased, showing a "volume growth, price decline" trend: imports of bulk commodities such as iron ore and crude oil increased significantly, but prices fell year-on-year. Steel mills profit margins are thin but the demand to replenish inventories at low prices still exists. In December, China's soybean imports saw a slight year-on-year increase, becoming one of the key driving forces for import growth. In addition, driven by the artificial intelligence frenzy, imports of intermediate products in China's high-tech sector were active, such as a 20% annual growth in computer parts imports, showing strong demand for critical components in the domestic industry upgrade. On the demand side, with efforts to stabilize growth and expand domestic demand, there was also a rebound in imports of some consumer goods and production materials. Risk warning: Uncertainties in EU and US tariff policies are significant.