China stabilizing force in global trade

China is emerging as an increasingly important source of stability for the global trading system. Despite mounting geopolitical tensions, rising protectionism and slowing global trade growth, the country has both the capacity and structural foundations to sustain relatively stable trade expansion.

According to customs data, China's two-way trade in goods reached 25.47 trillion yuan ($3.77 trillion) in the first half, up 16.9 percent year-on-year. The significance of this performance becomes clear only when viewed against the broader backdrop of the global economy.

International trade does not exist in a vacuum. It reflects the interaction between production and demand across economies. Unlike domestically driven investment or fiscal stimulus, trade cannot simply be created by administrative decisions. It depends on whether producers have goods or services the market needs and whether buyers are willing to purchase them. In that sense, trade is both a consequence of economic growth and a driver of it. Stronger economies generate demand for imports and exports, while expanding trade in turn supports growth by creating markets, jobs and investment opportunities.

This relationship makes the international context especially important. With the International Monetary Fund recently lowering its forecast for global trade growth this year, China's trade performance is all the more notable because it has come amid slowing global commerce rather than a synchronized global recovery.

Several structural features stand out amid the numbers. One is the durability of export growth. China's exports have now expanded for 17 consecutive months, suggesting that recent performance is not simply the result of temporary factors such as inventory accumulation, one-off policy incentives or short-term efforts to hedge against geopolitical risks. Sustained growth over such a period indicates that underlying demand remains intact and that Chinese exporters continue to occupy an important position within global production networks.

The explanation lies not in a single factor, but in a combination of structural strengths that have become increasingly evident over recent years. Among them is China's role in stabilizing global supply chains. Businesses around the world have learned that supply security can matter as much as price. As supply chains have been repeatedly disrupted by geopolitical tensions, logistics bottlenecks and extreme weather events, the ability to reliably obtain goods and services has become a competitive advantage in itself. For many manufacturers, Chinese suppliers continue to provide consistency that is difficult to replace.

Equally important is the nature of what China exports. A significant share of China's exports consists not of finished consumer products, but of intermediate goods, industrial components and production equipment. These products support manufacturing activity in importing countries, serving as essential inputs for industries ranging from automobiles to machinery and electronics. Rather than competing directly with industrialization elsewhere, many Chinese exports enable industrialization and reindustrialization abroad.

Innovation has become another increasingly important source of competitiveness. China's export strength is no longer driven primarily by manufacturing scale or cost advantages. It increasingly reflects technological upgrading, product innovation and the ability to respond quickly to evolving consumer needs. Recent demand in Europe for Chinese air conditioners during periods of unusually high summer temperatures illustrates how manufacturers have responded quickly to changing market conditions. More broadly, exports associated with renewable energy technologies and other innovative industrial sectors are helping countries pursue their own energy transition and industrial upgrading.

Imports tell an equally important story. Imports grew 22.1 percent in the first half, outpacing export growth by 8.7 percentage points. That is consistent with China's broader objective of promoting more balanced trade while continuing to expand market opening-up.

Imports and exports should not be viewed separately. In most economies, weaker exports often coincide with weaker imports because production, investment and consumption are closely linked. China's faster import growth instead reflects continued efforts to open market access rather than merely increase trade volumes.

Recent unilateral market-opening measures illustrate this approach. China expanded zero-tariff treatment to all African countries with which it has diplomatic relations beginning May 1, and has continued lowering tariffs for a broader range of trading partners. These policies are designed to increase market opening-up, expand consumer choice and deepen mutually beneficial trade relationships rather than simply boost import statistics.

The composition of imports also reflects underlying demand. China imported 1.43 billion metric tons of energy products and metal ores in the first half, up 3.4 percent year-on-year, while agricultural imports rose 8.6 percent. These figures underscore the role of China's large domestic market in creating opportunities for global commodity producers and agricultural exporters.

Regional patterns within China also point to longer-term structural changes. While the eastern region still accounted for 78.8 percent of total trade, faster trade growth in central and western China suggests that a gradual shift toward a more balanced regional trade structure. Greater geographic diversification may also improve the resilience of the country's external trade over time.

Another important indicator is the composition of trading firms. Private enterprises accounted for 57 percent of China's total foreign trade in the first half, with imports and exports rising 17 percent, while foreign-invested enterprises expanded trade by a slightly faster 17.1 percent. Strong growth by both private enterprises and foreign-invested firms suggests that commercial opportunities — rather than policy incentives alone — continue to underpin the nation's trade expansion. Businesses ultimately invest and trade where they see sustainable opportunities for growth and profitability.

Looking ahead to the second half, uncertainty will remain considerable. Geopolitical conflicts could continue to disrupt commodity markets and global logistics. Trade protectionism may further weaken confidence in the multilateral trading system. At the same time, artificial intelligence and other technological advances are reshaping global production and trade patterns, creating both opportunities and competitive pressures.

Even so, China's fundamental advantages remain intact. The trade growth seen since last year has been rooted largely in underlying production and consumption rather than short-term speculation or inventory accumulation. Such demand is more likely to be sustained. At the same time, deepening trust with trading partners and continued expansion of free trade agreements can provide greater certainty for businesses and a firmer foundation for long-term trade growth.

As services trade expands alongside goods trade, China's contribution to the global economy will increasingly be measured not only by the scale of its exports, but also by the stability, opening-up and connectivity it brings to the international trading system.

The writer is a researcher at the Chinese Academy of International Trade and Economic Cooperation. The article is translated from a recent speech by Zhou at a China News Service economic forum.

The views do not necessarily reflect those of China Daily.