Dual drivers

Data for the first half of 2026 highlights the shift in economic momentum with the growth in imports surpassing that of exports

The latest data from General Administration of Customs shows that the total value of China's imports and exports of goods reached 25.47 trillion yuan ($3.76 trillion) in the first half of the year, marking a 16.9 percent year-on-year increase. Exports stood at 14.73 trillion yuan, up 13.4 percent, while imports surged by 22.1 percent to 10.74 trillion yuan, resulting in a trade surplus of 3.99 trillion yuan.

This semi-annual report, released on July 14, not only highlights the robust growth of foreign trade but also reflects the shift in economic drivers, the structural optimization of the Chinese economy and the country's deepening opening-up.

One of the most notable changes in China's foreign trade in the first half of 2026 is the growth rate of imports surpassing that of exports by 8.7 percentage points. In the first quarter, imports grew 19.6 percent compared to an 11.9 percent increase in exports; from January to May, imports rose by 20.5 percent while exports increased by 11.8 percent; in June alone, imports surged by 36 percent and exports by 27 percent. Rather than a mere fluctuation, the pattern may reflect a recovery of domestic demand, particularly evident in the comprehensive growth in imports of industrial raw materials, energy commodities and consumer goods.

The change in import structure underscores the expanding domestic demand. In the first half of the year, imports of mechanical and electrical products reached 4.41 trillion yuan, up 28 percent, and imports of bulk commodities such as energy and metal ores totaled 1.429 billion tons, a 3.4 percent increase, while agricultural imports grew by 8.6 percent. Intermediate inputs and capital equipment dominate, marking a fundamental shift from the processing trade era to demand driven by active domestic investment, industrial upgrading and consumption improvement. In this sense, the high import growth is a leading indicator of domestic demand recovery.

For decades, China's economy has often been labeled as export-dependent and export-oriented. Now, with imports outpacing exports, China is steadily achieving a strategic shift from being driven by external demand to being led by domestic demand. This transformation matters because an economy primarily supported by domestic demand is more resilient to risks, has a more stable foundation and enjoys more sustainable growth. The vigorous import activity is a vivid illustration of the solid advancement of this transition and a practical outcome of building a new development pattern and smoothing the national economic cycle.

The 13.4 percent growth in exports is equally significant. In the first half of the year, exports of mechanical and electrical products reached 9.36 trillion yuan, a 20.1 percent increase, accounting for 63.5 percent of total exports; high-tech product exports rose by 39 percent to 3.26 trillion yuan. This shift indicates that China's exports are continuing to shift from traditional labor-intensive products to more tech- and capital-intensive products, steadily moving from scale advantage to quality advantage.

The nearly 40 percent growth in exports of high-tech products is driven not by price wars but by the completeness of industry chains, the continual release of its engineering dividend and the constant leap in the country's innovation capabilities. Behind this is the genuine enhancement of China's manufacturing competitiveness and the solid step forward from "Made in China" to "Intelligently Made in China". In the face of overseas claims of "low-price dumping" and "overcapacity", this export report card that has been gained through smart manufacturing and quality products serves as the most powerful rebuttal.

The continuous upgrading of the export mix lays a solid foundation for China to move up the global value chain. As more high-value-added products reach global markets, China's foreign trade bargaining power, risk resistance and irreplaceability will be simultaneously strengthened. From selling more to selling better, from reasonable quantitative growth to effective qualitative improvement, the path of high-quality development in China's foreign trade is becoming increasingly clear. This is not only a manifestation of competitiveness but also provides deep-seated confidence for sustained future growth.

In the first half of the year, China's trade with partners in the Belt and Road Initiative reached 12.97 trillion yuan, up 14.8 percent and accounting for 50.9 percent of the country's total foreign trade value. The significance of this figure lies not only in the scale expansion but also in its enhancement of structural optimization and strengthened resilience. The increasing diversification of trade partners means China's foreign trade dependency on a single market is continually decreasing, significantly enhancing its ability to withstand external shocks. Amid profound adjustments in the global economic and trade pattern and the rise of unilateralism and protectionism, market structure diversification provides an important buffer.

More broadly, the simultaneous growth of exports and imports reveals China's dual role in the global supply chain: it is both the world's factory and a global market. Strong exports demonstrate China's supply capability, while robust imports directly benefit countries that export minerals, energy, farm products or high-end equipment, making China an important engine driving global economic growth. This pattern of dual increases in imports and exports contrasts sharply with typical export-oriented economies: countries such as Germany and the Republic of Korea have net exports consistently accounting for more than 3 percent to 5 percent of GDP, whereas China's net export share remains around 2 percent. This indicates that the foundation of China's economy lies in domestic demand, with foreign trade serving to interconnect and mutually promote internal and external circulation rather than relying solely on external demand.

By promoting high-level openness to drive high-quality development, China's actions are firm and composed. While expanding exports, China is also actively seeking to increase its imports and promote more balanced trade. China injects sustained vitality into its economy and shares its development dividends with more countries through tangible market opportunities.

Currently, the world economy still faces many uncertainties, yet the resilience and vitality of China's economy are evident, as shown in the foreign trade semi-annual report. The Chinese economy, with increasing domestic demand, coordinated import and export growth and deep integration with global supply chains, is becoming more balanced, sustainable and competitive, laying a solid foundation for its continued healthy development.

The author is the deputy director and a researcher at the Economic Growth Research Office at the Institute of Economics at the Chinese Academy of Social Sciences.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.