China’s Q2 Trade Growth Is Strong in Nominal Terms, but Export Volumes Slow, Goldman Sachs Says
China’s goods trade posted strong nominal growth in the second quarter of 2026, driven mainly by a sharp rise in prices, according to a Goldman Sachs research note.
China’s goods trade posted strong nominal growth in the second quarter of 2026, driven mainly by a sharp rise in prices, according to a Goldman Sachs research note. Actual export volumes slowed, while import volumes showed a mixed performance.
Trade in the Middle East declined significantly as strait closures disrupted trade routes. Goldman Sachs forecasts that China’s goods-trade surplus will narrow slightly to 4.9% of GDP and that the current-account surplus will edge down to 3.5%. The firm has raised its forecast for export-volume growth and lowered its forecast for import-volume growth.
The key variables for the sustainability of China’s trade performance are the structural competitiveness of Chinese products and the continuing effects of oil prices and AI-related prices. The note’s logic is that price-driven nominal growth is accompanied by slower real export volumes, leading to a narrowing trade surplus.
Market attention may focus more on trade volumes than on nominal growth. The slowdown in actual export volumes is a signal that warrants caution.
The note describes the outlook as neutral to cautiously bearish. Strong nominal growth is offset by slower real volumes, while the trade surplus is narrowing to 4.9% of GDP. The structural competitiveness of Chinese products is a long-term positive, but price-driven nominal growth may not be sustainable. Expectations of a narrower trade surplus may already be partly priced in.
Potential catalysts identified in the note are: 1) actual import and export volume data in subsequent months; 2) further effects of Middle East developments on trade routes; and 3) the trajectory of prices for AI-related products.
Trade in the Middle East declined significantly as strait closures disrupted trade routes. Goldman Sachs forecasts that China’s goods-trade surplus will narrow slightly to 4.9% of GDP and that the current-account surplus will edge down to 3.5%. The firm has raised its forecast for export-volume growth and lowered its forecast for import-volume growth.
The key variables for the sustainability of China’s trade performance are the structural competitiveness of Chinese products and the continuing effects of oil prices and AI-related prices. The note’s logic is that price-driven nominal growth is accompanied by slower real export volumes, leading to a narrowing trade surplus.
Market attention may focus more on trade volumes than on nominal growth. The slowdown in actual export volumes is a signal that warrants caution.
The note describes the outlook as neutral to cautiously bearish. Strong nominal growth is offset by slower real volumes, while the trade surplus is narrowing to 4.9% of GDP. The structural competitiveness of Chinese products is a long-term positive, but price-driven nominal growth may not be sustainable. Expectations of a narrower trade surplus may already be partly priced in.
Potential catalysts identified in the note are: 1) actual import and export volume data in subsequent months; 2) further effects of Middle East developments on trade routes; and 3) the trajectory of prices for AI-related products.