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China’s chip exports nearly double in Jan-Jul; ‘New new three’ products to fuel continued export growth_我的网站
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But what are the facts on the ground?
China's Ministry of Commerce recently released a document titled China's Position on the So-Called Excess Capacity Issue. Reviewing the evolution of the global capacity landscape from a historical perspective, it offers an objective analysis of how industrial subsidies, trade surpluses, economic imbalances and market competition relate to "overcapacity," sets out China's policy practices and the direction of its efforts, and puts forward China's ideas and proposals - a forceful response to the "China overcapacity" narrative.
Plainly, the argument that "China's inadequate domestic demand gives rise to excess capacity" rests on a logical sleight of hand - it takes a localized phenomenon at the micro level of the market and applies it wholesale to the structure of the macroeconomy, a picture far removed from reality.
China is not only a major manufacturing power but also a major consuming power. Domestic demand has long been the main engine of the Chinese economy.
To see through the logical fallacy of the "overcapacity" narrative, one must first be clear about where the Chinese economy actually sits in the global landscape.
In the course of economic globalization, China has actively integrated itself into the international division of industrial labor and become the "world's factory" in the truest sense. Chinese manufacturing has enriched the global supply of goods, lowered living costs for consumers in countries around the world, and played an important part in easing global inflationary pressure. But to define China simply as a "producer" on that basis, and from there to conclude that it suffers from "inadequate domestic demand and overcapacity," is a proposition that does not hold water.
From 2013 to 2024, domestic demand contributed an average of 93 percent to China's economic growth, with consumption and investment accounting for an average of 55 percent and 38 percent respectively. China's total retail sales of consumer goods rose from 23.8 trillion yuan ($3.53 trillion) in 2013 to 50.1 trillion yuan in 2025, doubling in size.
Measured at the World Bank's purchasing power parity rates, China's total retail sales of consumer goods in 2025 were 1.7 times those of the US, making the country the world's largest market for consumer goods in all but name. China today ranks first globally in the physical volume of goods consumed, and its per capita annual consumption of some industrial products already approaches the levels seen in developed economies.
China keeps expanding its domestic demand and is working toward a higher-level balance between supply and demand.
Growth in China's total retail sales of consumer goods has slowed somewhat in recent years, and some have taken this as proof of weak domestic demand. That reading is neither objective nor complete.
A strong domestic market provides strategic support for Chinese modernization. The outline of China's 15th Five-Year Plan (2026-30) period devotes a dedicated part to building such a market, stressing the need to adhere to the strategic focus of expanding domestic demand, to expand effective investment, to further implement special actions to boost consumption, to promote the expansion and upgrading of commodity consumption, to unleashing the potential of service consumption, to strengthening the foundation of residents' consumption and to continuously improve the consumption environment - using new demand to guide new supply, and using new supply to create new demand, so as to promote a virtuous cycle between consumption and investment, and between supply and demand, achieve a higher level of dynamic balance between supply and demand.
The slowdown in retail sales growth is consistent with China's shift from high-speed growth to high-quality development, and it also reflects the upgrading of the country's consumption structure. China's consumer market is moving faster from one dominated by goods toward one in which goods and services carry equal weight. Spending on services is growing rapidly and is expected to account for more than half of the total by 2030.
China's super-sized market is not only the bedrock of its own development but also a broad platform on which countries around the world can share in the dividends of that growth.
China has ranked as the world's second-largest importer for 17 consecutive years and is a major export destination for nearly 80 countries and regions. It has granted zero-tariff treatment to 63 countries and regions, becoming the first major economy in the world to extend full zero-tariff coverage to every African country and every least developed country that has diplomatic relations with it. It is also the only country to host an international import expo, having staged eight editions of the China International Import Expo with cumulative intended deals worth more than $580 billion. Over the 14th Five-Year Plan period (2021-25) period, China's cumulative imports topped 90 trillion yuan. These facts and figures show clearly that China is not just the "world's factory" but, still more, the "world's market."
Looking ahead, China's middle-income group is set to exceed 800 million people within little more than a decade, and per capita GDP is expected to reach the level of a moderately developed country. With vast room for consumption and ample potential and vitality, domestic demand will remain the main engine of China's economic development and will keep injecting strong momentum into world economic growth.
This was compiled and translated by the Global Times English edition based on an article published in the "Chisu Jinsheng" economic commentary column of the People's Daily on August 6, 2026.
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China's exports of integrated circuits (ICs) reached $216.02 billion in the first seven months of 2026, up 99.5 percent year-on-year, according to data released by the General Administration of Customs (GAC) on Friday.
Chinese experts said that rising global artificial intelligence (AI) demand is a factor, but the main drivers of the leap in chip exports are the country's technological breakthroughs and upgraded industrial chain.
The robust growth in IC exports also came as China's overall foreign trade saw stable expansion. According to data released by the GAC, the sound upward trend in China's foreign trade continued in July, with growth of 19.2 percent year-on-year to reach 4.66 trillion yuan ($686.26 billion), remaining above 4 trillion yuan for the fifth consecutive month.
In the first seven months of the year, total foreign trade in goods amounted to 30.13 trillion yuan, up 17.3 percent year-on-year, the data showed.
"Since the start of this year, China's economy has forged ahead against headwinds and moved toward innovation-driven, higher-quality development, providing strong underpinning for the growth of foreign trade," said Lü Daliang, an official with the GAC.
According to the GAC, China's exports of electromechanical products reached 11.12 trillion yuan between January and July, up 21.2 percent year-on-year. They accounted for 63.8 percent of the country's total exports, up 3.8 percentage points on a yearly basis.
There was notable progress in green and low-carbon products, with exports of electric vehicles (EVs) and lithium batteries rising by 71.2 percent and 35.8 percent, respectively, while exports of 3D printers soared by 110 percent, with industrial robots jumping 13.2 percent and ships 32.7 percent.
"The surge in China's chip exports reflects breakthroughs in multiple aspects," Fu Liang, a Beijing-based tech analyst, told the Global Times on Friday. Fu pointed to a rise in mature-node capacity, industrial and supply chain resilience, and scale production advantages of Chinese companies.
As demand for chips in automotive electronics, industrial control systems, and household appliances keeps rising, China-made mature-process chips - backed by reliable supply capability and strong cost-performance - have become an indispensable link in the global supply chain, Fu said.
Meanwhile, there has been an upgrade in China's chipmaking industry, such as the new chip design approach at Huawei based on the company's Tau Scaling Law, and the international competitiveness of China-made chips is expected to increase, supporting further growth in exports, the expert noted.
China recently issued a revised regulation on protection of IC layout-designs. Scheduled to take effect on October 15 this year, the regulation aims to strengthen the protection and application of layout-designs, and improve registration and management systems by elevating proven practices into regulations, while also aligning with relevant laws and international treaties.
These institutional upgrades are unfolding alongside broader efforts to expand domestic demand and open the Chinese market wider to the world. China has also accelerated imports in the first seven months of this year to promote a more balanced development of foreign trade. China has remained the world's second-largest import market for 17 consecutive years. In the first seven months of 2026, China's import growth outpaced export growth by 8 percentage points, according to the GAC.
In addition, China's imports and exports with over 180 countries and regions registered growth over the period. Specifically, the country's trade with ASEAN, the EU, Latin America, and Africa rose by 20 percent, 9.5 percent, 15.4 percent, and 18.9 percent year-on-year, respectively. Trade with the US, however, fell by 1.6 percent, with the decline narrowing by 2 percentage points compared with the first half of the year, according to the GAC.
Amid a complex external environment, China has leveraged its complete industrial chain to accelerate trade structure upgrading, driving brisk growth in both imports and exports, Wen Bin, chief economist of China Minsheng Bank, told the Global Times.
Although China's foreign trade sector still faces pressure in the second half of the year, Wen said the same fundamentals are still supporting China's export growth: the competitiveness of China's "new new three" products, the ongoing AI investment cycle, plus a raft of domestic risk-mitigation policies covering forex, fiscal and customs.
"China's export sector is projected to hold onto double-digit growth in the second half of the year," he said.
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