China’s AI Export Engine Fuels Trade Surge
China’s export dynamics have undergone a remarkable transformation, with artificial intelligence-driven electronics and high-end manufacturing now constituting nearly 85% of its total shipments, as revealed in a recent report by ICICI Securities.
This notable evolution has reinforced export robustness, enabling trade to remain resilient in 2025, even amidst diminished demand from the United States.
In December 2025, exports experienced a year-on-year increase of 6.6%, surpassing projections and culminating in an annual growth rate of 5.5%. This shift toward superior goods has also alleviated the repercussions of U.S. tariffs, culminating in a historic trade surplus of $1.18 trillion for the year.
Shifting Focus Away From U.S. Markets
The surge in AI hardware and sophisticated manufacturing capabilities increasingly fortifies China’s export achievements.
Although shipments to the U.S. have contracted amidst ongoing trade discord, Beijing has adeptly redirected its attention to burgeoning markets such as ASEAN, the European Union, Latin America, and India.
China is systematically implementing a strategy of decoupling from U.S. markets and diversifying its export avenues on a global scale.
An undervalued currency, combined with robust demand for its high-end electronics and AI-enabling manufacturing sectors, bolsters substantial export momentum toward non-U.S. territories.
Shifts in Export Sectors
Mechanical, electrical, and high-tech products now account for approximately 85% of Chinese exports and are exhibiting double-digit growth rates.
These goods cater to escalating global AI-related demand and are less vulnerable to tariffs, owing to China’s preeminent position in their production.
Conversely, traditional export categories such as garments, textiles, and toys, which together represent about 8% of total exports, continue to languish.
Trends in Imports
China’s imports saw a rise in December 2025, propelled by heightened purchases of mechanical, electrical, and high-tech commodities, partly due to re-exports.
Energy imports also surged, indicating a strategic restocking initiative as authorities took advantage of declining global prices.
Signs of inventory replenishment are likewise apparent in base metal categories, especially iron ore and copper ore, as preparations for anticipated infrastructure investments in the first half of 2026 come into play.
Despite the uptick in December, overall imports remained stagnant for 2025, highlighting persistent weaknesses in domestic demand within China.
Source link: Whalesbook.com.
