China's Exports Surge 18.7% Year-on-Year, Delivering Strongest Economic Lift Since 1997

China’s export sector delivered its strongest contribution to economic growth in nearly three decades, with December shipments rising 18.7% year-on-year, according to preliminary data from the National Bureau of Statistics. This surge marked the highest monthly export increase since 1997 and played a pivotal role in pushing fourth-quarter GDP growth to 5.6%, surpassing expectations and signaling renewed momentum in the world’s second-largest economy. The export boom was led by high-value manufacturing exports, particularly electric vehicles (EVs), which climbed 42% annually, and semiconductor equipment exports, which rose 31%. Industrial machinery and solar panels also recorded double-digit gains, reflecting strong global demand amid supply chain diversification and energy transition trends. These sectors accounted for over 65% of the total export growth in the final quarter of 2025. The robust export performance comes at a critical juncture for China’s economic strategy. Domestic demand remains subdued, with consumer spending growing at just 2.3% year-on-year. However, export strength has helped offset weak internal consumption and property sector weakness, contributing approximately 1.4 percentage points to quarterly GDP growth—its largest contribution in over two decades. Global markets reacted positively, with the Shanghai Composite Index rising 2.1% following the data release. Export-oriented industries, including automotive manufacturers like BYD and tech firms such as Huawei, saw their stock prices climb by 5% to 8% over the week. Investors now anticipate continued export momentum, especially as China’s trade agreements with ASEAN, the EU, and Latin America take effect in early 2026.