Summary of Key Points
In the first five months of this year, the scale of foreign trade in the Yangtze River Delta reached a new historical high (7.82 trillion yuan, an increase of 16.2%), marking 15 consecutive months of positive growth. The logic behind this growth has undergone a qualitative change: AI computing hardware has replaced the "three new products" as the new driving force for growth. Emerging markets (especially ASEAN) have seen much faster growth than Europe and the United States. The three provinces and one city in the region have differentiated their roles and collaborated to expand overseas, transitioning from being a "world factory" to a "global technology supplier." However, labor-intensive industries still face challenges.
I. AI Computing Hardware: From the "Three New Products" to the New Driving Force
Previously, the Yangtze River Delta's foreign trade was supported by the "three new products" (electric vehicles, lithium batteries, and photovoltaic products), but now AI-related hardware has become the main engine of growth.
- Data Highlights: In May, imports and exports of AI products (integrated circuits, storage components, and automated data processing parts) in Shanghai increased by 87.9%, contributing 10.5 percentage points to the city's overall foreign trade growth—storage component exports more than doubled, and automated data processing part exports soared by 9 times! In Wuxi, integrated circuit exports increased by 50.7% and computer parts exports by 4.4% in the first four months.
- Why the Yangtze River Delta?: The region has a complete integrated circuit industry chain with leading companies such as SK Hynix, Changjiang Electronics Technology, and Huahong Semiconductor, enabling the local production of computing chips and storage components needed for AI without relying on imports. The expansion of global AI computing centers and the demand for intelligent technologies (such as robots) have directly translated into increased exports for the Yangtze River Delta.
- The "Three New Products" Remain Strong: Zhejiang's exports of these products increased by 51.7%, Anhui led the country in automobile exports, and Shanghai's photovoltaic product exports doubled—indicating a stable foundation with new growth drivers.
II. Emerging Markets Take Over: ASEAN Surpasses the EU as Shanghai's Largest Trading Partner
European and American markets have cooled due to tariffs and weak demand, with emerging markets stepping in as key drivers.
- Changes in Shanghai: In May, trade volume with ASEAN (70.11 billion yuan) surpassed that with the EU (69.57 billion yuan) for the first time, growing by 26.4%. Trade with Vietnam increased by 110.4%, with Chile by 77.7%, and with Colombia by 100%.
- The Three Provinces Follow: Zhejiang contributed 86.3% of the growth in trade with countries along the Belt and Road; Jiangsu saw a 28.8% increase; Anhui's foreign trade with these countries accounted for half of its total.
- Reasons Behind This: Policies like RCEP and the Belt and Road Initiative have made trading more convenient (e.g., reduced tariffs and faster customs clearance), allowing companies to shift exports to ASEAN, the Middle East, and Latin America. These regions serve both as markets for products and as locations for capacity expansion and consumption.
III. Differentiated Roles among the Three Provinces and One City
The four regions of the Yangtze River Delta (Shanghai, Jiangsu, Zhejiang, and Anhui) do not compete for business but focus on their respective strengths:
- Jiangsu: The largest by volume, with 74.1% of its foreign trade consisting of machinery and electrical products; processing trade grew by 39.1%, driven strongly by foreign-funded enterprises.
- Zhejiang: Private enterprises play a significant role, with rapid growth in market procurement and bonded logistics; emerging markets account for over 80% of its trade.
- Shanghai: Known for AI and the "three new products," with intelligent biomimetic robot exports accounting for one-fifth of the national total.
- Anhui: Led in growth (32.9%), with the highest automobile exports in the country, and double-digit increases in exports of the "three new products."
- Collaborative Efforts: Administrative barriers are being removed; for example, Shanghai focuses on AI research and development, Jiangsu on manufacturing, and Anhui on automobiles. The industry chain operates across provinces and cities, working together to expand overseas.
IV. Five Key Drivers of High Growth
The sustained growth in the Yangtze River Delta's foreign trade is driven by these five factors:
1. Shift in Global Demand: Green transitions (new energy vehicles, photovoltaics) and the expansion of AI (computing chips) have generated numerous orders.
2. Emerging Market Counterbalance: Growth in markets like ASEAN and the Middle East compensates for weak demand from Europe and America.
3. Private Enterprises + New Channels: Private enterprises are a major force, with cross-border e-commerce and overseas warehouses making sales more flexible.
4. Diversified Trade Methods: A combination of traditional trade, processing trade, and online commerce.
5. Integrated Cost Reductions: Faster customs clearance and more efficient river-sea transportation, along with increased overseas inventory needs in the third quarter, have led to concentrated order deliveries.
V. Hidden Concerns: Pressure on Labor-Intensive Industries
Behind the high growth figures, some industries are facing difficulties:
- National Trend: Overall exports of labor-intensive products decreased by 3.1%, and the Yangtze River Delta is no exception—Zhejiang's labor-intensive product exports remained flat compared to last year, while Anhui and Jiangsu did not provide specific data but clearly face pressure.
- Reasons: Labor-intensive industries have thin margins and are heavily affected by costs (raw materials, labor) and the shift in orders (e.g., to Southeast Asia). These industries need to transform to keep up with technological advancements.
Conclusion
The Yangtze River Delta's foreign trade is shifting from focusing on selling labor and basic products to offering technology, AI hardware, and new energy equipment. Emerging markets and differentiated collaboration are crucial, but the challenges faced by labor-intensive industries highlight that transformation is a gradual process that requires balancing the development of various sectors. In the future, the region must continue to leverage its technological advantages and collaborative efforts to consolidate its position as a global technology supplier.