China’s “three new” exports surge, despite tariff barriers

China’s high-tech exports are firing on all cylinders.

Per customs bureau (GAC) data:

• Across Q3, the aggregate export value of new energy vehicles (NEVs), lithium-ion batteries, and PV cells – China’s so-called “three new” exports – surged 33.4% y/y.

For comparison: Total export value grew 6.6% y/y over the same period.

In volume terms, shipments of these products shot up 40% y/y – the second-highest rate on record.

• NEV shipments jumped 74% y/y in Q3, while battery and PV exports each grew 22%.

Why we care: Unlike low-value-added goods, producing these products involves skilled labor (and higher-paying jobs) and extended supply chains – bringing positive knock-on effects across the wider economy.

• Policymakers began championing the "three new" exports in 2023 as success stories in Beijing’s industrial upgrading strategy and ambition to dominate strategically important industries.

A strategy of diversification, market dominance, and competitive pricing has also made the three new exports resilient to trade barriers.

• NEVs have averaged 24.5% y/y monthly growth in the 11 months since the EU – the largest export market – slapped tariffs on Chinese NEV exports.
• That's two percentage points higher than the 11 months before.
• Meanwhile, since the eruption of the most recent China-US trade war in April, export growth in these three categories has accelerated to its fastest pace in two years.

Get smart: The surge in China’s “three new” exports shows that industrial upgrading is translating into real-world, trade-tested competitiveness.

• Their resilience in the face of tariffs demonstrates these sectors are not only moving up the value chain, but also building market power that could shield China from future trade shocks.