Asia Economics Analyst China's Broad Based Export Strength to Persist Despite Limited AI Boost

Economics Research 23 August 2026 | 5:39PM HKT

China’s Broad-Based Export Strength to Persist Despite Limited AI Boost

n China’s nominal export growth has accelerated sharply in 2026, with higher Chelsea Song | prices playing a bigger role but volumes still up 11% in H1, pointing to China’s Goldman Sachs (Asia) L.L.C. broad manufacturing competitiveness. Under our narrow definition— Xinquan Chen semiconductors, printed circuits, storage and processing units, and computer | parts, excluding downstream electronic devices—AI-related products accounted Goldman Sachs (Asia) L.L.C.

for almost half of nominal export growth in Q2. In this note, we assess AI’s role in recent trade dynamics, revisit the drivers of real export growth, review recent import dynamics, and examine the potential impact of tightening EU trade policy. n AI-related trade has lifted headline (nominal) export values but is not yet a significant driver of real export growth. The recent boost has come mainly through prices, with AI-related products accounting for around two-thirds of export price growth, while volume growth has declined to -1.4% yoy in Q2. Moreover, around 80% of AI-related nominal exports are shipped under processing-trade regimes or special customs supervision zones. This suggests that much of the trade consists of imported inputs that are assembled or integrated in China before re-export, limiting the domestic value added and trade-balance impact. n Real export growth instead remains rooted in China’s broader manufacturing base. Ex-AI electrical equipment and machinery are still the largest contributors, while the “New Three”—solar cells, EVs and lithium-ion batteries—account for only around 5% of nominal exports but have added roughly 1.5-2pp to real export growth in recent quarters. Real exports of electrical machinery and transport equipment to the EU rose 19% in H1 2026. Most EM-bound export growth appears to reflect genuine local final demand rather than rerouting to DMs, with ASEAN remaining the primary exception as an active rerouting hub. n Chinese officials have identified AI, robotics and innovative drugs as the “New New Three,” the next generation of strategic export industries. Yet their measurable contribution remains limited, partly because these sectors are more services-oriented and are not captured cleanly in trade data. Their near-term significance is mainly strategic, as they offer China potential channels to export AI capabilities, automation solutions and pharmaceutical licensing income, supporting longer-term efforts to move up global value chains and reduce reliance on goods trade amid rising geopolitical tensions.

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Goldman Sachs Asia Economics Analyst

n In contrast, China’s import growth in 2026 has been narrow and price-led, concentrated in gold, while higher energy prices weighed on import volumes in Q2. AI-related imports mainly reflect processing trade and supply-chain requirements, while non-monetary gold import flows appear partly driven by policy decisions under China’s quota-based import regime. Excluding gold, our measure suggests China’s underlying trade balance widened further, reaching a cumulative US$1.3tn over the last 12 months. n Trade frictions with the EU impose a downside risk to China’s export outlook. Concerns over trade diversion and industrial pressure are likely to drive more targeted measures on sectors such as steel, plug-in hybrid electric vehicles (PHEVs), machinery, wind-turbine components and basic chemicals. We estimate existing and proposed EU measures could cover (at least on the margin) ~27% of China’s annual nominal exports to the EU. But this does not translate directly to export loss, with actual impact contingent on final policy specifics and implementation. Broader restrictions would threaten China’s market-share gains, though cost competitiveness, leverage in critical materials and Europe’s commercial interests should cushion the impact.