China Economy:Exports rebounded ahead of moderating 2026

China Economy Exports rebounded ahead of moderating 2026 Frank Liu(852) 3761 8957frankliu@cmbi.com.hk China’sexportsbeat market expectation due to broad-based improvement inexports totheEU, Latin America and Africa, while exports totheUS and ASEANunderperformed. Exports of integratedcircuits extended its rally thanks to theglobal AI booming cycle, reflecting China’s ongoing tech advancement. Ships andvehiclesremained in high prosperity, while personal consumption goods includingtech products, garments and property-related goods remained subdued. Importsimproved slightly thanks to the processing trade, while general trade furtherdipped as domestic demand remained tepid. We expect China’sgoods exportstomoderate in 2026, as global consumer demand moderated and front-loadedimports in 2025 due to tariffs created high base effects and demand overdraw.China’s exports may remain strong in industries including medical supplies,electricalequipment, automobiles,ships,aviation equipment, and AI-relatedproducts and destinations including Southeast Asia, the Middle East, Africa, LatinAmerica, and Eastern Europe. Looking forward, we expect China’sgoods exportsmay decrease from 5.2% in 2025 to 3.5% in 2026 while imports may rebound from-0.5% to 2%. The USD/RMBexchange rate may decrease from 7.07 at the endof 2025 to 7.02 at the end of 2026. Bingnan YE, Ph.D(852) 3761 8967yebingnan@cmbi.com.hk Source: Wind, CMBIGM Exportsrebounded thanks to the boost from EU, Latin America andAfrica.Exportsrebounded to5.9%(all on a YoY basis unless specified) inNovfrom-1.1% in Oct,notably beatingmarket expectationat3%.Exportsto the USfurther contracted to-28.6%inNovfrom-25.2% inOctwhilerebound in exports totheEU, Latin America and Africa made up the loss,rising 14.8%, 14.9% and 27.6% in Nov from 0.9%, 2.1% and 10.5% inOct.In addition, we saw a broad-based rebound in Nov as exports to UK,Canada,Australia,Japan,South Korea,India and Russia all notablyrebounded. Exports to ASEAN, on the other hand, moderated for the secondmonth from 11% to 8.2% in Nov.Trade surplusexpandedtoUS$111.7bn inNov,marking the biggest record in history. Chips and transport equipmentextended their rally while personalconsumption goods remained subdued.Integrated circuits surged 34.2%in Nov from 26.9% in Oct, boosting the headline exports YoY by 1.9pptsasglobal AI-related cycle remained in high prosperity. Integrated circuithasquickly risen from the 4thlargest export category to the largest in 2025,reflecting China’s resilience builtnotonly from price competitiveness butalso on continued tech advancement. Transportequipmentincludingshipsand vehicles remained robust at 46.4%and 53%in Nov. Meanwhile,personalconsumption goods remained subdued.Tech items includingpersonal computersand cell phonescontracted 7% and 12.6%.Low value-added exports, which faced the heaviest tariff impact, including textile yam,travel goods & bags,garment and toys remained in deep contractioncompared to3Q25,as well as the housing-related products includingfurniture, lamps & lighting products and home appliances.Rare earthexports expanded by 34.9% in Nov, reflecting the loosening of exportcontrols. Source: Wind, CMBIGM Imports slightly improved.China’s imports of goodsinched up to 1.9% inNov from 1% in Oct, missing themarket expectationsat 2.9%. Import valueof processing trade accelerated to 17.5% in Nov from 8.5%, while importsof general trade dipped to-5.5% in Nov from-1.6%.For energy products,import volume of coal andcrude oil dropped to-19.9% and 4.9% in Nov from-9.8% and-7.2%, while natural gas rebounded to 10.6% from-7.2%.Forraw materials, volume of iron ore and copper ore both picked up to8.5%and 12.8% in Nov. For intermediate products, volume of steel products,plastics in primary form, rubber and machine toolsrebounded while copper products further dropped. Import volume ofcrops remained strong as grainsand soybeansrose to 15.4% and 13.4% in Nov. We expect goods exports to moderate heading into 2026.Globaldemand growth and inflation levels are declining as the IMF forecastedglobal GDP growth to decrease from 3.2% in 2025 to 3.1% in 2026, and CPIgrowth from 4.2% in 2025 to 3.7% in 2026. Tariff impacts in 2025 led to front-loaded imports and inventory accumulation, creating high base effects anddemand overdraw. Global goods exports grew by over 5% in the first half of2025,but have significantly slowed since the second half. In 2026, weexpectChina's exports of medical supplies,electrical equipment,automobiles,ships,aviation equipment,and AI-related products willmaintain rapid growth, while traditional products such as clothing, toys,home appliances, and furniture may continue to be weak. In 2026, China'sgoods exports to Southeast Asia, South Asia, the Middle East, Africa, LatinAmerica, and Eastern Europe will maintain rapid growth, with modest growthto Western Europe, Australia, and East Asia, and a continued decline to theUS. Looking forward, we expect China’s goods exportsmay