China’s surging exports have been gaining international attention, but concerns about overcapacity have focussed on “strategic sectors”. Far less acknowledged is the fact that China has been gaining significant global export market share across the board, including in labour-intensive, lower-end industries that have historically been dominated by economies at earlier stages of their development. These broad-based gains are largely the result of industrial policy and a growing imbalance in China between domestic supply and demand across industries. Trump tariffs will result in a small drop in China’s export share. However, we think China will hold onto most of its export gains, with the country’s market share stabilising over the medium-term.
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