00:00China's foreign trade remains strong, despite shipping disruption in the Gulf region and ongoing trade friction with the United States.
00:08In the first seven months of 2026, China's trade in goods was over 4.3 trillion US dollars.
00:15That's up more than 17 percent year on year.
00:20In July alone, total trade was 674 billion dollars, a jump of nearly 20 percent.
00:26Imports grew faster than exports, helping to narrow China's overall trade surplus.
00:33In the first seven months, exports grew 14 percent. Imports increased 22 percent.
00:38In July alone, exports climbed nearly 18 percent. Imports up 21 percent.
00:45Mechanical and electrical products accounted for nearly two-thirds of China's total exports.
00:50Shipments of electric vehicles, lithium batteries and wind turbines recorded strong growth.
00:55The exports of 3D printers, industrial robots and ships also increased.
01:00Now, the figures also reflect strong global demand linked to artificial intelligence and high-tech manufacturing.
01:06China's exports of integrated circuits nearly doubled in the first seven months of this year.
01:11In July, they surged more than 166 percent from a year earlier.
01:17If we look at China's trading partners, double-digit growth with ASEAN, Africa and Latin America.
01:25Trade with the European Union also expanded.
01:28Trade with the United States declined, but only slightly.
01:33Gerard Lyons is a senior independent director of the Bank of China here in the UK.
01:37Hi, Gerard.
01:38Thanks so much for joining us.
01:40It looks like a resilient picture, but what does it say to you?
01:44Well, it certainly is a resilient picture on the trade side for China.
01:48It reflects sort of wider concerns about the Chinese economy.
01:51But in terms of the trade performance, it's a particularly strong picture.
01:55I think the three issues really from the trade side are the scale, what and where.
02:00The scale, as you've highlighted, it's a pretty impressive performance on exports.
02:05In terms of what, China has suddenly changed in the last few years from being focused on low-cost type
02:13exports,
02:13benefiting in the past from cheap labour in China.
02:16And it's certainly an indication now that China has moved up the value curve with a lot of emerging technologies
02:22and a lot of high-quality exports.
02:25And also, the wear is very interesting, particularly in the wake of the trade sanctions last year with the States.
02:31It's a clear indication that China has been able to diversify not only to the regions you've mentioned,
02:36but in particular, I would stress the European picture looks quite interesting for the future.
02:42So, scale, impressive, the quality of the exports improving,
02:46and they've diversified to ASEAN, to emerging economies, and to Europe in particular.
02:52China's imports grew more than its exports.
02:56Do you see that as a problem?
03:00No. Well, China's overall trade picture is quite impressive.
03:04It exports generally far more than it imports.
03:07The bounce-up in the imports is a positive signal.
03:11One of the interesting challenges about the Chinese economy this year has been the two-speed nature of the economy.
03:18In the first half of the year, the economy slowed significantly between the first and second quarter,
03:24still had 4.7% growth in the first half of the year.
03:27But the latest indicators suggest that China will be at the lower end of the 4.5% to 5
03:33% growth range for this year.
03:35But what we've seen, in addition to that strong export picture and strong trade picture that we talked about,
03:41has been pretty sluggish domestic growth.
03:43Consumption really only ticking over, weakness in the construction sector.
03:47If there's any indication of imports picking up, and if that's mirrored also by stronger retail sales in coming months,
03:55for instance,
03:56then that would be a positive sign.
03:57But for the moment, I wouldn't overstress the import picture,
04:01because it's still against the backdrop of what I would say is a sluggish domestic demand picture.
04:08Fair enough.
04:08A quick comment on the fact that trade with the U.S. only declined a little bit,
04:14if you look at the barriers and the tussles that are going on currently,
04:18and that trade with Europe has grown fairly substantially, I think just under 10%.
04:24I think this is a legacy of the involution that President Xi Jinping and others have talked about over the
04:30last 24 months.
04:32China's export sector is reflecting the strength of its industrial sector.
04:37And what we're seeing on the export side is a changing composition of China's exports,
04:42not only in terms of where it's going to, but in terms of the export composition towards Europe,
04:47in terms of electric vehicles, more linked to technology.
04:51And that's an indication of how the competitiveness of the Chinese economy has changed.
04:56And China is now becoming very competitive in higher quality type of goods,
05:01as it attempts to move up the value curve.
05:03Of course, it's helped also by the currency, the Chinese currency, also being very competitive.
05:08So the composition change in exports is very evident.
05:11Thank you so much for your time.
05:13Really interesting analysis.
05:14This is Gerard Lyons, Senior Independent Director of the Bank of China here in the UK.
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