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From 'shirts for planes' to 'leading in new energy' | examining 40 years of structural changes in china's exports to the u.s.

Tencent Auto 2025-08-08 10:14:11

In the late summer of 2025, a cargo ship loaded with CATL power batteries, DJI drones, and BYD electric vehicles departs from Shenzhen's Yantian Port, heading towards the Port of Los Angeles in the United States. The total value of this shipment exceeds $200 million. Forty years earlier, in 1985, a cargo ship of the same tonnage would have been mostly filled with clothing, toys, and canned goods. This contrast in scenes is a microcosm of the transformation in the structure of China's exports to the U.S., reflecting the journey of "Made in China" as it leaps from the lower end to the mid-to-high end of the global industrial chain.

78-2001: In the early stages of the reform and opening-up period, the "survival-oriented export" was dominated by "primary products + labor-intensive" industries.

In 1978, China's exports to the United States amounted to only $990 million, with primary products (agricultural products, mineral products) accounting for more than 60%. Manufactured industrial products were mainly labor-intensive products such as textiles, clothing, toys, and footwear. The export logic at this stage was simple and straightforward:Earning processing fees at the "end segments" of the global industrial chain by utilizing cheap labor costs.。

A typical example is the textile industry. In the 1980s, China's textile industry accounted for more than 20% of exports to the United States for a long time, but the profit for each exported garment was only 1/5 to 1/10 of that of foreign brands. A more typical "shirts for airplanes" phenomenon was that at that time, the profit from exporting 800 million shirts would only be enough to purchase one Boeing airliner.

Core Features 🛎：

Exports are mainly "resource-intensive and low value-added," characterized by low technological content and high substitutability.
The manufacturing industry is at the bottom of the "smile curve" of the global value chain (processing and assembly stage), lacking independent brands and core technologies.
The policy orientation targets "expanding export earnings" and relies on tax incentives and land subsidies to attract foreign-invested processing factories (such as the "three-plus-one" enterprises in the Pearl River Delta).

2. 2001-2018: Post-WTO Accession, "Electromechanical Rise + High-Tech" Driven "Scale Expansion Period"

On December 11, 2001, China officially joined the WTO, marking a "turning point" in the upgrading of China's export structure. Leveraging its low-cost advantages and comprehensive industrial system, China quickly integrated into the global division of labor. The export product structure accelerated its transformation from "primary products + labor-intensive" to "mechanical and electrical products + high-tech products."

Data Verification：

The proportion of electromechanical products in exports to the United States rose from 44.6% in 2001 to 58.3% in 2018, replacing textiles as the largest category of export goods.
The export proportion of high-tech products (such as integrated circuits, computers, and communication equipment) increased from 19.5% in 2001 to 31.2% in 2018.
In 2018, China's exports to the United States reached $478.4 billion, an increase of nearly eight times compared to 2001, with China remaining the United States' largest goods trading partner for many consecutive years.

The essence of progress：

Vertical integration of the industry chainFrom simple processing and assembly to "component production + complete machine manufacturing," for example, in the home appliance industry, companies like Haier and Gree transitioned from OEM for international brands (such as OEM for GE and Whirlpool) to launching their own brands, and even reverse acquisitions of overseas brands (such as Haier's acquisition of GE Appliances).
Horizontal breakthrough in technical capabilitiesIn the field of communication equipment, Huawei and ZTE have broken the monopoly of Cisco and Ericsson through independent research and development of CDMA and 5G technologies. In the consumer electronics sector, the Apple industry chain has driven companies like Luxshare Precision and GoerTek to become global core suppliers.
Policy and market dual driversThe optimization of export tax rebates and processing trade policies, combined with the large-scale production capacity cultivated by the vast domestic consumer market, endows "Made in China" with the dual advantages of "low cost + high efficiency."

3. 2018-2020: The US-China Trade War, the "Structural Differentiation Period" Driven by "Technological Blockades"

In 2018, the United States initiated a trade war against China based on "Section 301," imposing additional tariffs of 10%-25% on approximately 370 billion USD worth of Chinese goods in three rounds. This focused primarily on high-tech sectors related to "Made in China 2025" (such as semiconductors, communication equipment, and new energy). This "stress test" profoundly altered the structure of China-US trade.

Structural change：

Affected AreasThe export growth of high-end sectors in electromechanical products (such as servers and industrial robots) and high-tech products (such as chips and precision instruments) has slowed down or even declined.
Resilience domainTraditional labor-intensive products (such as furniture and toys) remain stable due to insufficient capacity substitution in Southeast Asia (industrial chain support is not well developed); new energy products (such as photovoltaic modules and lithium batteries) experience counter-trend growth due to the explosion of global demand and China's cost advantages (in 2019, the proportion of photovoltaic module exports to the U.S. still exceeded 50%).
"De-Americanization" and "Rebalancing"Chinese companies are accelerating their expansion into alternative markets such as ASEAN and the EU, while the proportion of exports to the US consisting of "non-U.S. technology-dependent" products (such as consumer goods and low- to mid-range electromechanical products) is increasing.

🇨🇳 Deep Meaning：

The trade war has exposed the "weaknesses" of China's manufacturing—fields such as high-end chips, industrial software, and precision instruments are still constrained by others; but it has also compelled the development of "strengths."Complete industrial system, ultra-large-scale market, rapid iterative technological capabilityFor example, after Huawei was cut off from supply, HiSilicon chips were "regularized," and domestic semiconductor equipment and material companies accelerated their technological breakthroughs. The establishment of Tesla's Shanghai Gigafactory has driven the upgrade of China's new energy vehicle industry chain (with companies like CATL and BYD entering the global first tier as a result).

4. From 2021 to Present: "High-Quality Upgrade Phase" Led by the "New Three" under Post-Trade War and "Dual Circulation"

After the U.S.-China Phase One trade agreement was reached in 2020, tariff tensions eased somewhat, but the global supply chain restructuring ("nearshoring" and "friendshoring") and China's "dual circulation" strategy propelled exports to the U.S. into a new stage.New energy, digital economy, high-end equipmentTo become a new growth pole, "Made in China" is shifting from "scale advantage" to a comprehensive advantage of "technology + green + brand".

Latest Data Highlights of 2025：

"New Three" (new energy vehicles, lithium batteries, solar cells)In 2024, the total export value of China's "new three" to the United States reached $128 billion, with its share of exports to the U.S. rising from 5.2% in 2020 to 18.7%, becoming the largest category of high value-added export goods.
Electromechanical product upgradeThe proportion of traditional home appliances (such as Gree air conditioners) has declined, but the share of "smart manufacturing" products such as industrial robots (Estun, Inovance Technology), smart cars (NIO, XPeng), and high-end medical equipment (United Imaging Healthcare) has increased to 35% of electromechanical product exports.
The Rise of Digital Services TradeIn 2024, the export value of cross-border e-commerce (SHEIN, Temu) to the United States exceeded $150 billion, with market shares in sectors such as apparel and home goods surpassing those of Zara and IKEA. The proportion of new service trades such as cloud services (Alibaba Cloud) and digital content (TikTok) increased from 2% in 2018 to 12% in 2024.

The underlying logic of progress：

Technological innovation-drivenIn 2024, China's R&D investment intensity reached 2.8% (only 1.1% in 2001), with the number of PCT international patent applications ranking first globally for five consecutive years. China has achieved "local leading" positions in fields such as 5G, new energy, and artificial intelligence.
Accelerating Green TransitionChina's photovoltaic module production accounts for over 80% of global capacity, lithium battery production accounts for over 60%, and the production and sales of new energy vehicles have ranked first in the world for nine consecutive years. "Green manufacturing" has become a new label for China's exports.
The resilience of the industrial chain is enhanced.Despite facing pressure from the U.S. "friendshoring" (such as Apple's efforts to shift some production capacity to India) and the EU's "carbon tariffs," China's "full industry chain cost advantage" in fields such as new energy vehicles and photovoltaics (from raw materials to end products) is difficult to match in the short term.

V. Future Outlook: Three Major Trends in China-U.S. Tariff Negotiations and Export Structure Predictions

Currently, the new round of tariff negotiations between China and the United States is at a critical stage (2025). The United States' focus has shifted from "reducing the trade deficit" to "industrial competition" (such as restricting China's high-end manufacturing and constraining technology transfer), while China is committed to "promoting high-level openness." In light of both parties' demands and the global industrial transformation, the future China-U.S. trade structure may exhibit three major trends:

Labor-intensive industries experience "gradient transfer," but China's position in the value chain is rising.

The export share of low value-added products such as clothing and toys will continue to shift to Southeast Asia (Vietnam, Indonesia) and South Asia (India, Bangladesh). However, Chinese companies are upgrading from "OEM factories" to "chain owners" by "going global" (such as Youngor setting up factories in Vietnam), "branding" (such as Anta's acquisition of FILA), and "digitalization" (such as SHEIN's flexible supply chain) to control the design, marketing, and logistics aspects.

In the high-tech field, "competition and cooperation coexist," and the acceleration of the replacement by independent and controllable products.

In sectors such as semiconductors, industrial software, and precision instruments, the United States will continue to restrict the export of high-end technologies through export controls. However, China has achieved global competitiveness in "mature processes" (above 28nm) and "special processes" (such as power semiconductors). In fields with strong China-U.S. complementarities, such as new energy (photovoltaics, lithium batteries) and the digital economy (cloud computing, AI applications), exports are expected to maintain growth and become a "ballast stone."

3. From "product output" to "product + service + technology" integrated output

With the expansion of the "Service Trade Innovation and Development Pilot" and the alignment with digital trade rules (such as DEPA), China's exports to the US will expand from single products to "products + services" (such as software subscription services for smart appliances) and "products + technology" (such as licensing of the three-electric system technology for new energy vehicles). By 2025, it is expected that China's trade deficit in services with the US will turn into a surplus for the first time, marking a comprehensive upgrade from "Made in China" to "Intelligent Manufacturing in China + Chinese Services."

Tianji Pavilion Observation:

From "follower" to "leader", the constants and changes in Chinese manufacturing.

Behind the 40-year transformation of export structure lies the profound shift of Chinese manufacturing from "survival-oriented" to "quality-oriented," and from "scale expansion" to "innovation-driven." The China-US trade friction has never changed the fundamental fact that "China is the global manufacturing center," but has instead accelerated the technological breakthroughs and industrial chain upgrades of "Made in China." In the future, regardless of the outcomes of tariff negotiations, China will rely on "dual circulation" as support and "new quality productivity" as an engine to occupy a more core position in the global value chain. This is not only progress for "Made in China," but also an inevitable aspect of China's high-quality economic development.

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