China’s Exports May Deliver a 'Selective Win,' but unlikely to repeat the broad export boom of the pandemic period

Overview

The report discusses whether China can once again reclaim global export market share to the extent seen during COVID under the backdrop of rising geopolitical tension in the Middle East. Its core conclusion is that China may achieve selective wins in green technology, new energy vehicles, batteries, solar panels, and related capital goods, but this time weaker global demand, higher energy prices, and poorer terms of trade mean the lift to aggregate demand and economic growth from higher export share will be clearly limited.

Core views

First, China's export-share increase during the pandemic was supported by a dual thrust of supply recovery and demand structure, with global export share up about 2 percentage points in 2020. Second, opportunities from the current Middle East conflict are more concentrated in sectors linked to energy security, electrification, and supply-chain resilience, especially the New Big Three Industries. Third, higher energy prices act like a tax on global real income, weakening household consumption, corporate profits, and investment appetite. Fourth, as a net energy importer, China’s energy import gap amounted to about 1.8% of GDP in 2025, and deteriorating terms of trade undermine real income. Fifth, even if export volumes or market share rise in some sectors, improvement in macro-level final demand may still be limited.

Analysis framework

The report revisits changes in China’s export share during the pandemic, compares the supply recovery, global demand structure, and sector contributions at that time, and contrasts these with the current energy-supply shock triggered by the Middle East conflict. The analysis focuses on sectors that could raise China’s export share, the offsetting effect of the decline in global trade volumes, the impact of energy prices on margins and inflation, and signs of sectoral rebalancing reflected in export prices and profit data for green products.

Methodology notes

• Macro Scenario AnalysisExport Market Share Stress Test

  Whether export-share gains can offset external-demand and terms-of-trade shocks

  The report estimates that to bring final demand back to pre-shock levels, China may need roughly a 0.9 percentage-point increase in global export share, while a lower-case estimate based on the direct contribution from the New Big Three Industries is around 0.3 percentage points.

• Historical ComparisonReview of Export Share Changes During the Pandemic

  Resonance between supply recovery and demand structure

  In 2020, China regained pandemic control earlier and restored industrial production, filling supply gaps when other exporters were constrained, while global commodity demand tilted toward electronics, medical supplies, and home-related goods, driving broad export-share gains.

• Sector Structure AnalysisNew Big Three Industries and Green Transition Demand

  Selective export opportunities driven by structural demand

  Greater demand for energy security, electrification, and supply-chain resilience supports demand for new energy vehicles, solar panels, batteries, and related capital goods—areas where China has scale, cost, and supply-chain advantages.

• Price and Margin AnalysisRe-inflation and Pricing Power Monitoring

  Export demand, price bottoms, and industrial margin improvement

  Using trade prices, industrial profits, and green-product export prices, the report concludes that pricing power in some high-demand sectors appears to be recovering, but the energy shock is more a price-level shock than one conducive to sustainable price growth.

Asset mapping & comparison

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

• China Macroeconomy

  Affected jointly by export share, energy prices, and global demand

  Strengths

  Green technology and related capital goods exports have scale, cost, and supply-chain advantages.

  Weaknesses

  Slowing global demand and rising energy import costs will weaken final demand.

  Comparison

  Compared with broad export-share gains during the pandemic, this round is more selective and structural.

  Risks

  If global trade volume continues to shrink or energy prices stay elevated, the growth boost from export-share gains to growth could be offset.

• New Energy Vehicles, Batteries, and Solar Industry Chain

  Directly benefits from demand for electrification, energy security, and green transition

  Strengths

  Export growth is strong, and some price indicators show bottoming and/or recovery signs.

  Weaknesses

  Historically high overcapacity keeps margin and price recovery dependent on external demand.

  Comparison

  Compared with traditional manufacturing, these industries are more likely to be the main source of export-share gains this cycle.

  Risks

  Lower-than-expected global demand, trade frictions, price competition, and excess capacity could weaken profit recovery.

• Energy and Refining-related Industries

  Clearly affected by oil prices and energy-supply shocks

  Strengths

  Rising energy prices may support nominal prices and inflation expectations.

  Weaknesses

  Domestic crude distillation utilization has fallen to near pandemic-era levels, pressuring refining margins.

  Comparison

  Upstream energy-price shocks are more unfavorable to downstream sectors, unlike the environment in which pandemic-era commodity-demand expansion dominated.

  Risks

  Further increases in energy costs could compress downstream margins and suppress investment.

• Non-ferrous Metals and High-tech Manufacturing

  Driven by global demand structure and the green transition

  Strengths

  The report notes improving pricing power and profitability in these high-demand sectors.

  Weaknesses

  Improvement still depends on demand durability and the ability to pass through costs.

  Comparison

  Compared with weaker-pricing power downstream sectors, these sectors are more likely to benefit from structural demand.

  Risks

  If external demand weakens or energy costs cannot be fully passed on, profit normalization may slow.

Key data

• Increase in China’s Global Export Share in 2020about 2 percentage pointsDuring the pandemic, China resumed production earlier and benefited from shifts in global commodity demand structure.
• Potential Export-Share Contribution from the New Big Three Industriesabout 0.3 percentage pointsIf strong growth momentum from Q1 2026 were to persist, related industries could deliver gains of this magnitude.
• Export-Share Increase Needed to Offset the Shockabout 0.9 percentage pointsThe report roughly estimates that a larger share increase is needed for final demand to return to pre-shock levels.
• Plausible Range of Export-Share Improvement0.3 to 0.9 percentage pointsThe report believes the actual outcome is likely to lie in this range, below the broad increase seen during the pandemic.
• China’s Energy Import Gapabout 1.8% of GDP in 2025As a net energy importer, China faces pressure from worsening terms of trade and rising production costs.
• 2026 Jan-Feb Growth Rate of Green Product Exports55%The report says green product export growth rose from 26% in 2025 to 55% in Jan-Feb 2026.

Impact & implications

For investment and macro assessment, the report implies that export improvement is more likely to appear in structural areas such as green technology, new energy vehicles, batteries, solar, and selected high-tech manufacturing, rather than in broadly improved overall exports. The energy shock may lift inflation readings and ease some deflationary pressure, but it will also compress downstream margins and global demand. Therefore, higher Chinese export share can cushion external shocks, but is unlikely to fully offset weak demand and worsening terms of trade.

Risks

• Falling total global demand, which would shrink the size of the export market.
• Rising energy prices worsening China’s terms of trade and weakening real income.
• As a net energy importer, China faces pressure on production costs and downstream margins.
• Sectors with weaker pricing power downstream may struggle to pass through higher costs.
• If the New Big Three Industries continue to face overcapacity and price competition, stronger exports may not translate into margin improvement.
• Trade frictions, geopolitical escalation, or supply-chain constraints could cap export-share gains.

What to watch

• Whether strong momentum in green-product export growth in Jan-Feb can continue in subsequent months.
• Whether export prices for new energy vehicles, solar cells, and lithium-ion batteries keep showing a durable bottom-and-recovery pattern.
• Whether China’s share of global export markets can approach the 0.9 percentage-point threshold needed to offset shocks.
• Changes in global energy prices, crude distillation utilization, and downstream sector margins.
• Whether PPI, CPI, industrial profits, and trade-price data confirm the re-inflation trend.
• The ongoing impact of the Middle East conflict on global trade volumes, household consumption, and corporate investment appetite.