Huo Jianguo Photo: Courtesy of Huo Jianguo

Technological progress and innovation are strengthening China's foreign trade resilience and accelerating the sector's shift to middle and high-end positions in the global value chain. The progress is driven by the country's efforts to increase products value, optimize export structures, explore the emerging market, and promote digital transformation. 

In the first half of this year, China's foreign trade experienced a notable increase in tech value, making further progress in structural optimization. This underscores the country's strong innovation-driven capabilities and growing international competitiveness.

First, there was rapid growth in high-value-added manufactured products with a long supply chain. According to the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, in the first five months of 2025, the trade value of China's mechanical and electronic products rose by 7.1 percent year-on-year, reaching nearly $1.29 trillion. Exports totaled $891.1 billion, up by 8.1 percent. 

The good performance represents the long-term shift the country makes toward high-end, intelligent manufacturing, which has become an indispensable part of the global market.

Second, technological advancements are driving the export growth of the "new three items" - electric vehicles, lithium batteries, and solar panels - supported by the strong resilience of the private sector. The sectors have become major drivers of China's export growth in recent years, with exports continuing to show strong momentum in the first half of 2025. 

Notably, the private enterprises have demonstrated extraordinary resilience, breaking through artificial trade barriers erected by certain countries. The growing resilience of China's foreign trade is largely due to the private sector's strenuous efforts to diversify markets and upgrade their products. These factors have played a crucial role in supporting China's foreign trade against external challenges.

Third, technological innovation is driving digital trade growth and cross-border e-commerce growth too. As reported by Xinhua News Agency in June, China's cross-border e-commerce exports surpassed the 2-trillion yuan ($280 billion) mark last year, signaling the accelerated digital transformation of the trade sector. Facing external pressures, China's goods trade has remained brisk, with cross-border e-commerce continuing its growth trajectory.

Overall, technological innovation has played a leading role in leading China's foreign trade development, helping overcome external trade restrictions and barriers by certain countries. Innovation has continuously improved the competitiveness of Chinese products in global markets. 

The transition to high-quality economic development driven by technological innovation is upgrading the country's goods trade, increasingly concentrating on export of high-value-added goods. The effort is expected to further boost the growth of export volume and product prices. At the same time, China's export structure is now optimizing, constantly climbing the global value ladder toward the middle- and high-end.

Moreover, China's technological innovation will continue to drive the high-quality development and deeper transformation of the giant economy. In addition, new economic drivers in the services trade sector are gaining momentum rapidly.

Last year, China's research and development spending exceeded 3.6 trillion yuan, up by 8.3 percent year-on-year, ranking second globally. This robust investment is fueling innovation, contributing to high-end manufacturing, digital infrastructure build-up and mew services, ramping up China's export sector competitiveness. 

Technological innovation has been elevated to an unprecedented strategic height in China. From January to May 2025, national fiscal spending on science and technology research and development reached 360.9 billion yuan, a year-on-year increase of 6.5 percent, demonstrating the continued emphasis on driving new innovations. 

The key to optimizing China's foreign trade structure lies in constantly implementing the opening-up strategy, expanding import and export items as well as service trade, increase overseas investment, and strengthen Belt and Road cooperation.
 
In the process, technological innovation is expected to continue to play a decisive role, serving as a key engine driving the country's high-quality development. By strengthening technological innovation, China will continue to improve its position in the global value chain, drive its economy toward high-quality and high-value transformation, and enhance its value-creating capacity and international competitiveness.


The author is former president of the research institute of China's Ministry of Commerce. bizopinion@globaltimes.com.cn