In-depth Analysis of China's Export Commodity Structure in 2024: Shift from Labor-intensive to Technology-intensive

Current Status

In 2024, China's total exports reached $3.4 trillion, with mechanical and electrical products (HS84-92) rising from 58% in 2019 to 65%, while textiles and apparel (HS61-63) dropped from 12% to 9%. The "new three items" (new energy vehicles, lithium batteries, photovoltaic products) collectively exceeded $200 billion in exports, growing 35% year-on-year.

• Mechanical & electrical products: Automation equipment, integrated circuits, and new energy vehicles lead growth.
• Traditional labor-intensive: Clothing, furniture, and toys continue to lose share, though absolute value remains above $600 billion.
• Resource-based products: Steel and aluminum exports face slower growth due to anti-dumping measures abroad.

Drivers

Key factors driving structural upgrading include:

• Industrial upgrading: China's R&D spending reached 2.64% of GDP; value-added growth of high-tech manufacturing outpaces the industrial average.
• Policy support: Export tax rebates and free trade agreements (e.g., RCEP) reduce costs for high-tech exports.
• Global demand shifts: Green transition boosts demand for new energy products; reliance on high-tech equipment deepens in Europe and the U.S.
• Supply chain advantages: China possesses a complete supply chain, forming cluster effects especially in electronics and new energy.

Challenges

Numerous challenges emerge during the transition:

• Trade barriers: Tariffs on EVs and chips by Western countries, plus technology controls, limit high-end exports.
• Rising costs: Labor and land costs increase, driving some labor-intensive industries to Southeast Asia.
• Intensified competition: Vietnam and India gain share in low-end manufacturing; Japan and South Korea compete fiercely in high-end segments.
• Dependence on external technology: Semiconductors and high-end instruments still rely on imports; self-sufficiency needs strengthening.

Recommendations

To continuously optimize the export commodity structure, the following strategies are proposed:

• Boost R&D investment: Break through bottleneck areas like semiconductors and new materials to enhance product value.
• Diversify markets: Expand into Belt and Road countries, Latin America, and Africa to reduce reliance on Europe and the U.S.
• Refine trade policies: Provide targeted support for emerging industries, such as export credit and insurance innovation.
• Promote green transformation: Develop low-carbon technologies to address environmental barriers like the Carbon Border Adjustment Mechanism (CBAM).
• Strengthen branding: Shift from OEM to ODM/OBM to improve international pricing power.