China Economy: Exports remained resilient

CMB International Global Markets |MacroResearch | EconomicPerspectives China Economy Exports remained resilient Frank Liu(852) 3761 8957frankliu@cmbi.com.hk China’s exportsnotably expanded by 21.8%YoYin 2M26inUSD terms,likelysupported by front-loading due toalateChinese New Year (CNY), lower baseand the global semiconductor upcycle. Exports totheUS notably narrowedthecontraction since 2Q25.Imports rebounded markedly driven by AI-relateddemand including copper-related materials and integrated circuits. We expectChina’sgoods exports to remain resilient in 2026,supported by the AIinvestmentupcycle and China’s comparative advantage in cost amongmanufacturing sectors. However, softer external backdrop including risingenergy pricesthatmay erode purchasing power and increase shippingcostscould weigh onthemomentum.Looking forward, we expect China’sgoodsexportstomoderate from 5.2% in 2025 to 4% in 2026 while imports mayrebound from-0.5% to 2%. USD/RMB rates may appreciate from the current6.87 to 6.8 by June 2026,andthen depreciate to 6.9byyear end. Exports notably rebounded amid CNY distortions and lower base.Exportsrebounded to21.8%(all on a YoY basis unless specified) in2M26from 6.6% in Dec,notably beatingmarket expectation.Besidesalower basein 2025, part of the upside likely reflected calendar effects, as the lateCNYpromptedcorporates to front-load shipments before the holiday.Fordestinations, exports to theUS recoveredfrom-30% in Dec 2026 to-5.5%on average in Jan-Feb 2026, while exports to ASEAN,theEU and Africafurther picked up.Exports to Latin America, Japan and India, on the otherhand, moderated.Trade surplusexpandedto US$213.6bn in 2M26 fromUS$124.7bn in 2M25, marking thebiggest record in history. Exports saw broad-based rebound by product.Chip exports continuedto surgeby 36.3% on average in 2M26 after rising 47.7% in Dec 2025,supported bytheglobal semiconductorupcycle. Integrated circuitshavequickly risen from the4thlargest export category in 2023 to the largest in2025, reflecting China’s resilience builtnotonly from price competitivenessbut also on continued tech advancement. Personal computersfurther pickedup 10% on average in Jan-Feb, while cell phonesdropped 4.2% on averageafter declining 8.6% in 4Q25. Transport equipment including ships andvehicles remained robust at 46.4%and53%. Personal consumption goodsrebounded, as low value-added exports including textile yam, travelgoods& bags, garment and toysnotably recovered, as well ashousing-relatedproductsincluding furniture,lamps&lighting products and homeappliances. Imports improved driven by AI-related demand.China’s imports of goodsaccelerated to 19.8% in 2M26 from 5.7% in Dec. Import value of processingtrade dropped to 11.3% in 2M26 from 22.4% in Dec, while imports of generaltrade recovered to 4.1% from-2.4%. AI-related demand notably picked up,as import volume of copper ore and integrated circuits rose 5% and 9% in2M26, while their price surged by 30.8% and 28.3%.For energy products,import volume of coal andcrude oil increased 1.5% and 15.8% in 2M26,while natural gas dropped 1.1%.For raw materials, volume of iron orepicked up 10%. For intermediate products,volume of steel&copperproducts, plastics in primary form, rubber and machine toolssignificantlydropped. Import volume ofsoybean dropped 7.8% while grain rebounded2.9%. We expect goods exportsto remain resilient in 2026.The strong Jan-Feb export print was likely supported by temporary factors such as the CNYtiming mismatch and a lower base.Nevertheless,we expectexports toremain resilient in 2026 supported by the global semiconductor upcycle andChina’scomparative advantage in cost among manufacturing sectors.However, softer external backdrop as rising energy prices erode purchasing power and increase shipping costs, may weigh onthemomentum.Lookingforward, we expect China’s goods exportsmay moderate from 5.2% in 2025to 4% in 2026 while imports may rebound from-0.5% to 2%. USD/RMB ratesmay appreciate from the current 6.87 to 6.8 by June 2026,and thendepreciate to 6.9byyear end. Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Source:Wind,CMBIGM Disclosures& Disclaimers Analyst CertificationThe research analyst who is primary responsible for the content of thisresearch report, in whole or in part, certifies that with respect to the securities or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about the subject securities or issuer; and (2)no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific views expressed by that analyst in this report.Besides, the analyst confirms that neithe