China’s goods surplus is down 5.3% year on year in Jan-Apr, partly because exports to the U.S. fell by 10%. Annualised, the Jan-Apr surplus still points to around US$1.1tn in 2026.
China’s imports rose in Jan-Apr 2026, but the breakdown is important. Imports under general trade increased 12% year on year, while imports outside general trade jumped 40%.
That gap matters. Non-general trade includes customs regimes linked to processing, bonded flows and supply-chain operations. Its share also matters. Imports outside general trade accounted for 44% of China’s total imports in Jan-Apr 2026.
In other words, a large part of China’s import growth is coming through channels more closely linked to factories, supply chains and re-export activity than to ordinary consumer demand.
Overall, this fits the broader picture of a Chinese economy where production remains stronger than household demand.
The policy language has changed too. The XIV Plan still presented the rising role of general trade as part of China’s trade-upgrading story. The XV Plan, covering 2026-2030, does not repeat that same emphasis. It talks more directly about expanding intermediate-goods trade and upgrading processing trade. This is not a full policy reversal, but it is a change in tone. It also fits the current customs data, where imports outside general trade are growing much faster than imports under ordinary general trade.
Following the May 15 publication of a curated selection of Xi Jinping’s speeches, the Party’s theoretical journal doubles down on the real economy and manufacturing. Qiushi tells Party members that China’s hard power rests on the real economy, but the article makes clear that manufacturing is the centre of that concept.
In our view, China shows no intention of giving up even a small part of its manufacturing capability.
China’s retail-sales growth remains weak. In Jan–Apr 2026, retail sales reached CNY 16.5tn, only 1.9% higher than a year earlier. That is a modest nominal increase and well below the pace suggested by headline real GDP growth.
April’s CPI and PPI rebound looks less like a broad domestic reflation than a cost shock, with energy and commodity prices doing much of the work.
China’s surplus with the U.S. narrowed in Jan-Apr, but this is not a clean rebalancing. Total bilateral goods trade contracted, with China’s exports to the U.S. down 10.2% and imports from the U.S. down 10.9%. The gap narrowed because both sides traded less, not because China bought much more from the U.S.
China’s surplus with Germany jumped to US$13.9bn in Jan-Apr 2026, from US$7.9bn a year earlier. Germany represents roughly one-quarter of EU GDP, but absorbs about one-third of the EU’s goods trade deficit with China.
The Nuctech case has turned one of the EU’s more technical trade tools into a political flashpoint. The formal instrument is the Foreign Subsidies Regulation, or FSR, but the argument is now much bigger than procurement law. China’s reaction has been harsh. Beijing calls the FSR discriminatory, protectionist and extraterritorial, and has now told Chinese entities not to help the EU probe.
A search of the EU tenders database shows why the case matters. Nuctech mobile and fixed scanners appear across multiple member states and sensitive locations. In a cursory inspection, we found recent 2025–2026 procurement hits in Italy, Ireland, Poland, Croatia, Lithuania, Slovenia and Slovakia. That does not prove a security problem. But it does show that the EU’s subsidy question is being asked in a sector where price, public money and strategic infrastructure meet.
Indium phosphide, or InP, has been subject to Chinese export controls since February 2025. It matters because it is used in high-performance optical and photonic components, including parts used in fibre-optic networks, data centres and telecom equipment.
The problem is that EU public trade data does not give us a clean InP line so we have to look through imperfect windows.
One window is the wafer/substrate side. There, the broad EU code does not show China dominance. The other window is the compound-material side. There, the broader EU code changes the picture sharply.
In 2025, China supplied 79% of EU import quantity under this code and 71% of import value.
There is also a price signal. The average EU import price from China under 28539090 was €12.87/kg, compared with around €20/kg for non-China suppliers. That suggests China is not only a large supplier in this broad bucket which includes indium phosphide. It also ships at a much lower average unit value.
The strategic relevance of InP is not theoretical. In March 2026, construction began in Eindhoven on what is described as the world’s first industrial-scale 6-inch indium phosphide photonic chip factory, backed by the EU Chips Act and aimed at applications from AI data centres and 6G to defence and high-performance computing.
China-UK goods trade was roughly half the size of China-Germany trade in Jan-Apr 2026, yet China’s surplus with the UK was much larger: US$23.3bn versus US$13.9bn. Compared with a year earlier, the surplus increased by almost US$4bn, close to US$1bn per month.
China’s Jan-Apr imports from Russia reached CNY 330bn in 2026, the highest level in this six-year series and more than double the 2021 pre-war level. These are import values in current yuan, not adjusted for price changes. Still, the trend is clear. Chinese imports from Russia remain well above pre-invasion levels.
By the time you read this, Putin will be heading to China for a state visit hosted by Xi Jinping on May 19.
China ran a US$7.2bn goods surplus with Latin America in Jan-Apr 2026. But that regional figure hides a sharp split. China had a US$10.5bn deficit with Brazil, while running a much larger surplus, around US$17.7bn, with the rest of Latin America. Brazil is the counterweight: it absorbs part of China’s regional surplus and makes the overall balance look less one-sided than it really is.
China-Africa goods trade rose strongly in Jan-Apr 2026, but the growth was not balanced. China’s exports to Africa increased by almost US$18bn, while imports from Africa rose by less than US$6bn. China’s surplus with Africa jumped to US$36.8bn, nearly 50% higher than a year earlier. Put simply, China’s goods surplus with Africa widened by about US$3bn per month compared with Jan-Apr 2025.
China’s Jan-Apr energy import data does not show an obvious rush to buy in response to Hormuz. Crude oil import volumes were almost flat, up only 1.3% year on year, while natural gas imports fell 6.2%. That does not look like a broad emergency build-up of imported energy.
The stronger number is refined petroleum products, up 12.5% by volume. But that signal needs care. China’s refined-product imports are dominated by fuel oil and naphtha. Fuel oil points mainly to Russia. Naphtha has a Gulf angle, with the UAE as the main supplier, but it can also be substituted by Russian supply.
April accounted for only 12% of China’s Jan-Apr refined-product import volume, so most of the increase was already in the data before Hormuz tensions could fully show up in customs arrivals.
For now, the data does not suggest a rush.