BEIJING — China expects its trade in goods and services to continue growing despite a complicated global environment, with artificial intelligence and green technology identified as important drivers of future overseas demand.
The State Administration of Foreign Exchange said in its first-half balance-of-payments report that China expects trade in goods to expand and services trade to strengthen. The regulator also said cross-border investment is expected to remain active as global investors diversify their holdings.
AI products become a major trade driver
Artificial intelligence is increasingly affecting China’s export outlook because the technology requires a large ecosystem of hardware and equipment. Servers, electronics, power systems, cooling equipment and other components are all connected to the expansion of AI infrastructure.
China has a large manufacturing base capable of producing many of these products. As AI investment expands globally, Chinese companies can benefit from demand for equipment and components, although access to advanced semiconductor technology remains a significant issue.
Green technology remains another export strength
China is also a major producer of products used in clean-energy systems. Electric vehicles, batteries, solar equipment and related components have become important parts of international trade.
Global demand for clean energy continues to create opportunities for Chinese manufacturers. At the same time, trade disputes over subsidies, industrial capacity and market competition have led some governments to consider tariffs or other protective measures.
Services trade is becoming more important
The foreign-exchange regulator expects services trade to grow alongside trade in physical goods. China plans to promote exports of technology and digital services while also increasing imports of services.
Digital services can include software, online business services, technology support and other activities that can be delivered across borders without shipping a physical product.
Foreign investment and the yuan
SAFE said foreign investment into China is expected to improve as global capital diversifies into yuan-denominated assets. The government is also seeking greater two-way financial opening and further international use of the yuan.
Greater international use of the Chinese currency could reduce some transaction costs for companies that trade with China. It could also increase the role of Chinese financial markets in global portfolios.
Why cross-border investment matters
Foreign investment can bring capital, technology, management expertise and access to international markets. China has been trying to attract more foreign investment at a time when multinational companies are reassessing global supply chains.
Some businesses are diversifying production across several countries, but China remains a major manufacturing and consumer market. Policy measures that improve market access and financial openness could influence investment decisions.
Global trade remains uncertain
The positive trade outlook comes against a backdrop of changing tariff policies and geopolitical tensions. China recently extended two investigations into U.S. trade practices until December 27, while Beijing and Washington continue negotiations on tariffs and other economic issues.
European governments are also examining their trade relationship with China. That means Chinese exporters are operating in an environment where market opportunities remain large but trade rules can change quickly.
AI and green exports face different challenges
AI-related exports depend heavily on access to advanced components and international technology markets. Green technology exports, meanwhile, can face concerns over domestic manufacturing, subsidies and the speed of China’s industrial expansion.
Companies therefore need to manage both technological and regulatory risks as they expand internationally.
China’s domestic demand remains important
Export growth can support manufacturing and employment, but policymakers also want stronger domestic consumption. September’s manufacturing PMI returned to expansion at 50.1, while private services activity rose to 51.6.
These indicators suggest some improvement, but the broader recovery remains uneven. Domestic demand, property activity and business investment will continue to influence China’s economic performance.
What businesses should watch
International companies will be watching China’s trade data, currency policies, tariff negotiations and foreign-investment rules. They will also monitor demand for AI equipment, electric vehicles, batteries and other technology products.
For Chinese exporters, diversification into emerging markets may become increasingly important as trade relationships with the United States and Europe evolve.
Why this matters to the global economy
China’s trade performance affects shipping, commodities, manufacturing and technology markets worldwide. A sustained increase in exports of AI and green products could reshape supply chains and intensify competition in several industries.
At the same time, greater international investment in China could strengthen financial links between the Chinese economy and global markets.
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Source: Reuters reporting on China’s State Administration of Foreign Exchange outlook.
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