In July, Beijing reported a 27 percent increase in Chinese exports compared to June 2025; however, analysts had expected only 18.2 percent. The export boom was driven primarily by semiconductors, computer technology, and automobiles. In the case of semiconductors, however, part of the increase in value was attributable to higher prices rather than larger volumes. Imports rose by 36 percent, yet the trade surplus reached 125.6 billion dollars. Consequently, the export boom is intensifying trade conflicts with the US and Europe and increasing competition for German manufacturers.
Semiconductor prices drive Chinese exports
The value of Chinese semiconductor exports doubled within a year, even though the volume of units exported fell. Julian Evans-Pritchard of Capital Economics therefore attributes the increase in value primarily to scarce and more expensive memory chips. Data processing equipment also saw a 53.1 percent rise in value. Consequently, a significant portion of China’s exports was driven by price increases rather than higher volumes.
Image: Shutterstock
The automotive industry also shipped significantly more goods abroad; the value of vehicle exports surged by 69.6 percent. In June, China exported more than one million cars in a single month for the first time. Additionally, 32 billion integrated circuits were shipped to foreign buyers. The sectoral mix nevertheless illustrates the extent to which Beijing is orienting its industry toward technology and global demand.
Germany imports significantly more goods from China
In June, China’s exports to Germany were 27.2 percent higher than the previous year’s figure, whereas imports from Germany grew by only 3.1 percent. During the first half of the year, China supplied goods worth $67.5 billion to Germany, while Germany sold goods valued at only $45.2 billion to China. Consequently, Germany’s trade deficit reached $22.3 billion.
China also widened its lead in trade with the European Union. The monthly surplus rose from $30.7 billion to $32.9 billion. Chinese shipments to the EU increased by 18.5 percent in June, while EU exports to China grew by only 9.2 percent. This disparity intensifies competition, particularly in the sectors of automobiles, machinery, batteries, and industrial electronics.
Export Boom Meets Weak Demand in China
Exports remain crucial for Beijing because domestic demand is growing only sluggishly. China’s economy expanded by just 4.3 percent in the second quarter—the lowest quarterly growth rate since late 2022. Consequently, the retail sector, investment, and the real estate market provided significantly less economic momentum than the industrial and foreign trade sectors; real estate investment actually fell by 18 percent in the first half of the year.
China is therefore likely to continue relying on foreign buyers to keep its factories running at capacity. Moreover, the industrial export ratio recently reached its highest level since the country joined the WTO in 2001. For Germany, this translates to increased low-cost competition in technologically sophisticated products. At the same time, however, dependencies regarding batteries, intermediate goods, and electronic components are growing. Europe must therefore more closely integrate its own investment strategies, trade protection measures, and supply security.
Author: Blackout News
Sources: Financial Times (21.07.26) – Reuters (15.07.26) – AP (15.07.26) – Süddeutsche Zeitung (14.07.26) – Elektroniknet (14.07.26)