Price increases lifted China's nominal import and export growth in Q2 2026; surplus expected to narrow moderately

Overview

The report reviews China's trade performance in Q2 2026 and updates its forecasts for the merchandise trade surplus and current account. The core conclusion is that nominal export growth remains strong but is increasingly supported by rising prices; import growth is likewise driven mainly by prices, while volumes are weighed down by high oil prices and weak domestic demand. Goldman Sachs expects export volumes to remain solid over the next several quarters, while import volume growth remains relatively subdued.

Core views

China's real exports grew 6.6% year over year in Q2, slowing significantly from 14.1% in Q1; however, export prices rose 11.8% year over year, lifting nominal export growth to 18.4%. On imports, nominal growth reached 25.8% year over year in Q2, while import prices rose 24.9% year over year, indicating that import growth was driven mainly by prices rather than volumes. For 2026, Goldman Sachs raised its export volume growth forecast to 7.9%, lowered its import volume growth forecast to 4.4%, and expects both the merchandise trade surplus and current account surplus to narrow moderately.

Analysis framework

The report uses price-volume decomposition, product- and region-level attribution, an external-perspective trade tracker, and a current account forecasting framework to distinguish price factors from real trade volume factors in nominal trade growth, while updating forecasts based on energy prices, the Middle East conflict, the artificial intelligence capital expenditure cycle, and the recovery in tourism services trade.

Methodology notes

• Trade Growth DecompositionPrice-Volume Decomposition

  Decompose nominal import and export growth into price changes and changes in real volumes.

  This method is used to determine whether trade growth comes from genuine demand and supply expansion or mainly from price increases. The report shows that both export and import nominal growth in Q2 was significantly supported by rising prices.

• Trade Attribution AnalysisProduct- and Region-Level Attribution

  Break down import and export performance by product category and trading-partner region.

  The report compares changes in categories including mineral products, electronic equipment, machinery and equipment, transport equipment, stone/glass/metals, as well as regions including the Middle East, the Eurozone, and large emerging markets.

• High-Frequency TrackingChina External-Perspective Trade Tracker

  Use published data from trading partners to estimate China's import and export trends.

  The report states that this tracker is broadly consistent with official export data but slightly underestimated official import growth in May; the May export estimate sample covered 31.1% of China's export value in 2025, while the import estimate sample covered 65.5% of China's import value in 2025.

• Macroeconomic ForecastingCurrent Account Forecasting Framework

  Forecast the current account by combining the merchandise trade surplus, services trade deficit, import prices, and export competitiveness.

  The report expects the merchandise trade surplus to narrow in 2026, while the services trade deficit narrows modestly as inbound tourism recovers, together bringing the current account surplus down modestly to 3.5% of GDP.

Asset mapping & comparison

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

• China Export Manufacturing Chain

  Directly benefits from resilient export volumes and rising prices.

  Strengths

  Strong structural competitiveness; transport equipment, particularly automobile exports, showed notable volume growth, and China continued to gain share in the Eurozone and large emerging markets.

  Weaknesses

  Real export growth slowed significantly in Q2 compared with Q1, and some exports may involve statistical complexities related to transshipment through emerging markets.

  Comparison

  Nominal export growth exceeded real export growth, indicating a stronger price contribution.

  Risks

  Slowing external demand, trade frictions, regional conflicts, and disruptions to transport routes could affect export performance.

• Energy and Crude Oil-Related Imports

  A key driver of import price and import volume forecasts.

  Strengths

  High energy prices lifted nominal import values.

  Weaknesses

  Mineral product import volumes fell 17.1% year over year in Q2, showing that high oil prices and weak demand suppressed real import volumes.

  Comparison

  The increase in import prices far exceeded import volume performance, indicating that strong nominal imports do not necessarily imply strong domestic demand.

  Risks

  Events such as the Middle East conflict, elevated oil prices, and strait closures could amplify price and supply chain volatility.

• Current Account and RMB Macro Assets

  Changes in the current account surplus affect the external macroeconomic balance.

  Strengths

  The 2026 current account is still expected to remain in surplus at 3.5% of GDP, above the Bloomberg consensus forecast.

  Weaknesses

  The merchandise trade surplus is expected to decline from 5.4% of GDP in 2025 to 4.9% in 2026.

  Comparison

  The surplus is expected to narrow modestly in 2026, but the report expects the current account surplus could rise again in 2027 as import price pressures ease.

  Risks

  If import prices remain elevated or export volumes fall short of expectations, the current account surplus could contract further.

• Gold and Stone/Glass/Metal Import Chain

  Reflects areas of strength in import volume growth.

  Strengths

  Imports of stone/glass/metals, including gold, rose 23.5% year over year in volume terms in Q2, the strongest performance among the categories measured by volume.

  Weaknesses

  Import sources are concentrated; the report notes that the other countries category includes Switzerland, a major source of China's gold imports.

  Comparison

  This category contrasts with the decline in mineral product import volumes.

  Risks

  Gold prices, safe-haven demand, and fluctuations in trade data from source countries could affect subsequent readings.

Key data

• Q2 Real Export Growth6.6% year over yearBelow 14.1% in Q1.
• Q2 Export Price Growth11.8% year over yearQ1 was -0.4%, ending thirteen consecutive quarters of year-over-year contraction.
• Q2 Nominal Export Growth18.4% year over yearAbove 13.7% in Q1.
• Q2 Nominal Import Growth25.8% year over yearAbove 21.0% in Q1, driven mainly by import prices.
• Q2 Import Price Growth24.9% year over yearQ1 was 5.3%.
• 2026 Export Volume Forecast7.9%Raised from the previous forecast of 7.2%.
• 2026 Import Volume Forecast4.4%Lowered from the previous forecast of 6.8%.
• 2026 Export Price Forecast10.4% year over yearThe previous forecast was 2.9%.
• 2026 Import Price Forecast21.8% year over yearThe previous forecast was 7.6%.
• 2026 Merchandise Trade Surplus Forecast4.9% of GDPBelow 5.4% in 2025.
• 2026 Current Account Surplus Forecast3.5% of GDPBelow 3.7% in 2025 and slightly above the Bloomberg consensus forecast of 3.4%.

Impact & implications

The report implies that China's external demand and export competitiveness remain important supports for macroeconomic growth, but price factors are having a significant impact on nominal trade readings. Rising energy prices and price increases related to the artificial intelligence capital expenditure cycle will lift import and export prices, reducing the merchandise trade surplus as a share of GDP; meanwhile, weak domestic demand and high oil prices constrain import volume growth. For macro assets, the current account remains in surplus, but a marginal narrowing of the surplus could reduce the strength of external-surplus support for growth and the exchange rate.

Risks

• The Middle East conflict and strait closures could disrupt trade flows and push up energy prices.
• High oil prices combined with weak domestic demand could continue to suppress import volume growth.
• If external demand weakens, China's export volume resilience could be below the report's expectations.
• The artificial intelligence capital expenditure cycle could drive up prices of related products, increasing uncertainty around price forecasts.
• Some exports to the United States may be transshipped through other emerging markets, increasing the difficulty of interpreting regional data.
• The external-perspective trade tracker relies on disclosed data from trading partners and could diverge from official data when sample coverage is insufficient.

What to watch

• Whether real export volumes maintain solid growth over the next several quarters.
• Whether import volumes continue to be constrained by high oil prices and weak domestic demand.
• Whether the Middle East conflict, energy prices, and transport routes cause further disruption to trade prices.
• Whether prices of electronic equipment, semiconductors, and machinery and equipment continue to be supported by the artificial intelligence capital expenditure cycle.
• Whether the services trade deficit continues to narrow as inbound tourism recovers.
• Official and unofficial manufacturing new export orders indexes, as well as the divergence between the external-perspective trade tracker and official data.
• Whether the 2026 current account surplus approaches 3.5% of GDP and whether it rebounds in 2027 as import prices decline.