Summary: A report from BofA Global Research finds that China’s exports are likely to hold up in 2026, even as external pressures mount from higher energy costs, geopolitical frictions and a firmer yuan. The bank projects overall export growth of 4.8% for the year after a rapid expansion that saw exports rise about 15% year-on-year in the first quarter of 2026.
After a robust 2025 for overseas shipments, China started 2026 with a strong export performance. Exports increased by roughly 15% year-on-year in the first quarter of 2026, a pace that BofA says is expected to ease but remain positive through the remainder of the year. The 4.8% growth forecast for 2026 signals continued export momentum despite several headwinds.
Global market stress has been amplified by heightened tensions in the Middle East, which have contributed to higher energy prices and raised concerns about a potential slowdown in trade flows. At the same time, the Chinese yuan has strengthened by about 6% over the past year, creating worries that more expensive renminbi-denominated goods could dampen overseas demand.
But the research note emphasizes that nominal currency moves are not the only determinant of trade competitiveness. BofA highlights the importance of the real exchange rate - which adjusts for inflation differentials - and notes that China’s relatively low producer price inflation has helped counterbalance the impact of a stronger yuan, thereby keeping Chinese exports competitively priced on international markets.
Technology-related shipments are identified as a central pillar of export resilience. Exports of integrated circuits surged sharply in early 2026, underpinned by global investment in artificial intelligence infrastructure such as data centers across Southeast Asia. China has become a significant supplier of so-called mature-node chips that are used in large-scale AI deployments.
The report also points to the role of automakers as a support to semiconductor demand. Chinese carmakers expanding production overseas, particularly in electric vehicles, are increasing demand for chips and related components, further underpinning technology exports.
Beyond semiconductors and automotive, the transition to cleaner energy sources is expected to sustain global demand for Chinese-made equipment. As countries accelerate investments in solar, wind and other clean energy solutions - partly in response to energy shocks - China’s leading position in these supply chains positions it as a major exporter. Electric vehicle shipments are expanding quickly as well, with strong uptake not only in passenger cars but also in public transportation systems worldwide.
Overall, BofA’s analysis suggests that a combination of sectoral strength in technology, the automotive transition toward EVs, and China’s dominance in renewable-energy supply chains will help keep exports resilient through 2026, even as energy costs and currency appreciation pose challenges.
Key points
- China’s exports rose about 15% year-on-year in Q1 2026, and overall export growth is forecast at 4.8% for 2026 - supporting further trade resilience.
- Technology products, especially integrated circuits, are driving export strength, aided by global AI-related investment and China’s role as a supplier of mature-node chips.
- Demand for EVs and renewable-energy equipment underpins exports, with Chinese automakers’ overseas expansion and global clean-energy investments boosting related shipments.
Risks and uncertainties
- Rising energy prices linked to Middle East tensions could still weigh on global trade and manufacturing costs - affecting energy-intensive sectors.
- A stronger yuan - up roughly 6% over the past year - could make Chinese exports more expensive if inflation dynamics change and offsetting effects from low producer price inflation dissipate.
- Geopolitical tensions present a continued downside risk to trade flows, which could influence demand for Chinese exports across technology, automotive and renewable sectors.