China's Foreign Trade Maintained High Growth in July, with Semiconductors Still the Core Engine but the Price Effect Starting to Narrow

Overview

The report analyzes China's trade data for July 2026. Growth in both exports and imports slowed from June but remained at high levels, with semiconductors and other AI-related electronic products continuing to dominate growth. Although the trade surplus retreated from a historical high, it remained the third-highest on record. The body text data clearly correspond to July, which is inconsistent with the “June” wording in the original title; interpretation should therefore be based on the month in the body text.

Core views

First, the AI-driven global technology upcycle remains the core support for China's foreign trade, with ICs and ADP equipment contributing about 42% of export growth. Second, semiconductor trade is still mainly driven by prices rather than actual volumes, but the price contributions on both the export and import sides narrowed simultaneously for the first time, possibly indicating that the YoY contribution from chip prices is approaching its peak. Third, exports to the United States accelerated due to front-loading ahead of tariff adjustments, creating a risk of reversal in August, but the low base in the second half of 2025 remains favorable for YoY performance in the second half of 2026. Fourth, the decline in import growth was not caused by weakening chip demand; import growth from South Korea rose to 97.9%, indicating that import momentum in the technology supply chain remains strong. Fifth, the decline in crude oil import volumes narrowed significantly, but volume growth for major commodities such as coal, soybeans, iron ore, and copper generally weakened.

Analysis framework

The report is based on customs trade YoY data and decomposes it across five dimensions: aggregate levels, products, destinations, trade modes, and price versus volume contributions. It compares July data with June, market consensus expectations, and Nomura forecasts. For semiconductor trade, it further estimates the percentage-point contribution of ICs to overall import and export growth, and measures the price effect by the difference between value growth and volume growth.

Methodology notes

• Macroeconomic Data AnalysisImport and Export YoY and Expectation Gap Analysis

  Compare current-month import and export YoY growth, prior-month growth, and forecast values

  Used to assess the absolute level of foreign trade momentum, marginal changes, and strength relative to market expectations.

• Growth AttributionProduct Contribution Decomposition

  Estimate each product's percentage-point contribution to overall import and export growth

  The report focuses on measuring the contributions of ICs and ADP equipment to identify the extent to which AI-related trade drives overall growth.

• Price-Volume AnalysisValue-Volume Growth Decomposition

  Infer the price contribution through the difference between value growth and volume growth

  This method shows that semiconductor growth still mainly comes from prices, but the price contribution in July narrowed marginally for the first time versus June.

• Regional AnalysisTrading Partner Destination Decomposition

  Compare trade growth across markets such as the United States, European Union, ASEAN, South Korea, and Japan

  Used to distinguish the impact of technology supply-chain strength, regional demand, and tariff front-loading behavior on trade growth.

• Seasonality TreatmentChinese New Year Dislocation Smoothing

  Use the January-to-March average to smooth data distortions caused by Chinese New Year

  The report charts use the average of the first three months of the first quarter to reduce the interference of changes in the Chinese New Year date on YoY comparisons.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China Semiconductor and AI Hardware Industry Chain

  Direct Beneficiary

  Strengths

  ICs and ADP equipment together contributed about 42% of export growth, IC import and export value growth both remained elevated, and volume growth also improved.

  Weaknesses

  Growth still relies mainly on the price effect, while actual volume expansion is relatively limited.

  Comparison

  IC export value grew 116.8%, far above volume growth of 1.9%; import value grew 71.1%, above volume growth of 8.5%.

  Risks

  The YoY contribution from chip prices may peak, and a slowdown in global AI capital expenditure or supply-chain demand would weaken export momentum.

• China Export Manufacturing

  Overall Positive but Divergent

  Strengths

  Automobiles, ships, electronic products, and some labor-intensive products maintained growth, with relatively diversified export destinations.

  Weaknesses

  Growth in some regions and products slowed significantly, with growth cooling for destinations such as India, Australia, Canada, and Brazil.

  Comparison

  Automobile exports grew 60.3% and ships grew 94.3%, while toy exports still fell 1.7%.

  Risks

  Weakening external demand, trade protection measures, and a high base may depress subsequent YoY growth.

• Asian Semiconductor Supply Chain

  Positive

  Strengths

  China's imports from South Korea grew 97.9% YoY, showing continued strong demand for memory chips and the technology supply chain.

  Weaknesses

  Part of the high growth came from price increases, and supply-chain strength is highly dependent on the global AI cycle.

  Comparison

  Import growth from South Korea rose further from 84.8% in June to 97.9%, contrasting with the slowdown in overall import growth.

  Risks

  A decline in memory chip prices, inventory adjustments, or an escalation of export controls could cause significant volatility.

• Crude Oil and Industrial Commodities

  Crude Oil Marginally Improved, Other Commodities Weak

  Strengths

  The decline in crude oil import volumes narrowed from -41.3% to -24.3%, indicating some recovery in purchasing activity.

  Weaknesses

  Import volume growth for coal, soybeans, iron ore, and copper all declined from June.

  Comparison

  Copper import volumes shifted from growth of 4.0% to a decline of 11.5%, while crude oil imports showed a clear marginal recovery.

  Risks

  Weak domestic industrial demand, geopolitical changes, and oil price volatility may affect the subsequent import pace.

Key data

• July export YoY growth23.9%June was 27.0%; market consensus was 23.0%, and Nomura's forecast was 22.9%.
• July import YoY growth27.5%June was 36.0%; market consensus was 29.5%, and Nomura's forecast was 31.5%.
• July trade surplusUSD112.5bnJune was a record USD125.6bn; July remained the third-highest on record and expanded by USD15.3bn from the same period last year.
• IC export value growth116.8%June was 122.3%; July IC export volume grew 1.9%, with a price contribution of about 112.6 percentage points.
• Export contribution from ICs and ADP equipment10.0 percentage pointsEquivalent to about 42% of overall export growth, including a 6.5 percentage-point contribution from ICs and a 3.5 percentage-point contribution from ADP equipment.
• IC import value growth71.1%June was 72.2%; import volume growth rose from 6.6% to 8.5%, while the price contribution fell from 61.5 percentage points to 57.7 percentage points.
• Export growth to the United States17.1%June was 15.0%, partly driven by advance shipments before tariff adjustments.
• Import growth from South Korea97.9%June was 84.8%, reflecting continued strong demand for memory chips and the regional technology supply chain.
• Export growth of ADP equipment and parts67.9%June was 53.2%, making it an important source of growth for AI-related exports.
• Crude oil import volume growth-24.3%The decline narrowed significantly from -41.3% in June, and the report believes Beijing has partially resumed purchases.

Impact & implications

Trade data continue to support China's export chain and the Asian semiconductor supply chain, especially benefiting AI-related areas such as ICs, memory chips, servers, and computer components. Improved chip volume growth suggests that actual demand is beginning to strengthen, but the current high growth in value still relies heavily on prices. If the YoY contribution from global chip prices peaks, revenue growth for related exporters may slow accordingly. Exports to the United States are supported in the near term by advance shipments and may fall back in August; on the other hand, the lower base from last year is expected to continue supporting YoY readings in the second half of 2026. The recovery in crude oil purchases is positive for import demand, but weaker import volumes for other industrial commodities reflect still uneven domestic demand outside the technology sector.

Risks

• Value growth in semiconductor exports and imports is highly dependent on prices, and the narrowing price contribution may mean that the YoY boost from this chip price cycle is approaching its peak.
• Exports to the United States were affected by advance shipments ahead of tariff adjustments, and a mild reversal may occur in August.
• The United States raised substitute tariffs on China from 10% to 12.5%, and further escalation of trade policy could suppress subsequent exports.
• Weakening import volume growth for commodities such as coal, soybeans, iron ore, and copper indicates that domestic demand and industrial activity still face structural pressure.
• The body text mainly analyzes July 2026 data, but the original title refers to June, creating a data risk from inconsistent month labeling.

What to watch

• Whether exports to the United States fall back in August as advance shipments end.
• Whether the price contribution to IC exports and imports continues to decline, and whether volume growth can offset the weakening price effect.
• Whether imports from South Korea and exports of ADP equipment can maintain high growth, to validate the sustainability of the global AI technology cycle.
• Subsequent changes in US Section 301 tariffs and China's countermeasures.
• Whether the recovery in crude oil imports continues, and whether imports of industrial commodities such as copper and iron ore can stabilize.
• The extent to which the low base in the second half of 2025 supports export YoY growth in the second half of 2026.