In the past two years, developing economies overtook advanced economies to represent the majority of China’s imports and exports. In tandem, China reduced its share of total trade with more geopolitically distant partners—including the Europe 30, Japan, South Korea, and the United States—by almost ten percentage points between 2017 and 2024.
Much of China’s shift toward developing economies was the result of growing trade ties with ASEAN, which in 2024 overtook the Europe 30 to become China’s largest trading partner region (Exhibits 9 and 10). Many of the sectors registering the most substantial trade shifts—like electronics, machinery, and textiles—are those where China’s role is evolving as an upstream supplier of intermediate inputs to ASEAN. ASEAN economies, in turn, produce finished goods for the global market and, increasingly, the United States. Between 2017 and 2024, the share of ASEAN’s electronics exports headed to the United States doubled, rising from 10 to nearly 20 percent. One notable exception to this pattern is Indonesia. Its trade with China grew at a remarkable 12 percent annually on average between 2017 and 2024, powered by Indonesia’s exports of metals and minerals, particularly nickel.
China’s trade with Latin America has also been on a steady upward trajectory, bolstered by China’s agricultural imports from the region and China’s export growth in manufactured goods, spanning consumer electronics and clean technology products such as photovoltaic cells, lithium-ion batteries, and electric vehicles (EVs). Much of this trade growth has been powered by trade with Brazil—which in 2024 represented almost 50 percent of all of China’s trade with Latin America, up from just over 40 percent in 2017.8 However, many Latin American economies have been experiencing rapidly growing trade with China. The value of trade between Brazil and China grew about 13 percent annually between 2017 and 2024. Peru and Colombia experienced a similar growth rate. And for some smaller economies, trade growth with China has been even brisker, with Ecuador and Costa Rica, for example, posting trade growth rates of nearly 20 percent annually.
China has also deepened trade ties with Russia. Russia is a growing source of energy resources for China and is emerging as a significant destination for China’s automobiles and other transportation equipment. In 2017, only 2 percent of China’s transportation equipment exports went to Russia. By 2024, that figure was more than 10 percent.
With the reorientation toward the developing world, China’s share of trade with Europe 30 economies has fallen marginally. This was mainly driven by a change in the sector mix of China’s imports rather than by European economies losing significant share in any sector. For example, European economies gained share of China’s transportation equipment imports between 2017 and 2024, rising from about 50 to about 60 percent. However, the total value of China’s imports in this sector fell by about 4 percent annually as China’s domestic automotive sector continued to grow, reducing its import dependency. As a result, the value of Europe’s transportation equipment exports to China stagnated—the larger slice did not compensate for the shrinking pie. A similar pattern can be seen in European exports to China of textiles and apparel and, to some extent, chemicals and pharmaceuticals.
By 2024, trade partners in the developing world accounted for more than half of China’s imports and its exports. Japan, South Korea, and the United States tended to lose share of China’s trade, while ASEAN economies, Russia, and Latin America gained share. As a result, ASEAN became China’s largest goods trade partner in 2024.
China’s exports tended to reorient away from the United States across sectors. Japan and South Korea typically lost share of China’s exports, too. Transportation equipment was China’s fastest-growing export sector. This reflected both a surge in internal combustion engine (ICE) vehicle exports to Russia and other developing economies, and a meteoric rise in EV exports, about half of which were exported to Europe in 2024.
Between 2017 and 2024, China’s imports of energy resources, metals and minerals, and agricultural products roughly doubled in nominal value. Indonesia gained share in metals and minerals, powered by its rising nickel exports to China. And Brazil gained share in agriculture, driven in particular by its rising exports of soybeans and beef.
Germany reduced trade with Russia substantially, and trade with China may be showing early signs of slowdown
Russia’s invasion of Ukraine triggered a sharp shift in how Germany sources its energy imports, with the United States emerging as a major supplier. This shift meant that, in 2024, the United States overtook China as Germany’s largest partner in goods trade. To give a sense of the magnitude of Germany’s pivot away from energy imports from Russia, Russia’s share of Germany’s energy imports fell from more than 30 percent in 2017 to just 1 percent in 2023.
Germany’s share of trade with China has been falling in recent years (Exhibit 11). However, unlike the United States, whose lower trade with China mainly meant reducing imports, Germany’s recent trade distancing from China has mainly been a result of a reduction in the share of Germany’s exports headed to China. In some of its largest export sectors, including chemicals, machinery, and transportation equipment, the share of Germany’s China-bound exports has been on a steady downward trend since 2020, with further decreases in 2024. This trend may partly reflect a loss of market share of German auto manufacturers in the Chinese market, as well as changes in industrial competitiveness in sectors such as chemicals resulting from commodity price changes in the wake of Russia’s invasion of Ukraine.9
The EU continued to rely on Chinese imports, but China’s reliance on EU exports fell. Between 2017 and 2024, China’s share of imports to the EU from outside the bloc increased from 18 to 21 percent. But the share of the bloc’s exports heading to China fell from a peak of more than 10 percent in 2020 to about 8 percent in 2024.
One standout area of growth has been the trade relationship between Germany and Poland. Between 2017 and 2023, this was the trade corridor within the Europe 30 that grew the most by value. The increase was powered by the integration of the two economies in transportation equipment and machinery value chains, for example through trade in lithium-ion batteries, internal combustion engines, and other vehicle parts. The available 2024 data suggest that this corridor’s growth is continuing, but at a more moderate pace.
The United Kingdom’s goods trade intensity has declined
On average, the goods trade intensity of high-income economies globally rose by 3 percent between 2017 and 2023, but it fell by 3 percent for the United Kingdom. This decline was mainly driven by slower growth of UK goods exports. Between 2017 and 2023, the nominal value of UK goods exports grew by under 2 percent each year on average (Exhibit 12)—the slowest export growth rate of the Europe 30 economies. Indeed, in real terms, the value of UK goods exports decreased by almost 15 percent between 2017 and 2023, and available data suggest that it declined further over the course of 2024.10
As with many other European economies, the United Kingdom sharply reduced its trade with Russia following the latter’s invasion of Ukraine; goods trade fell by more than 90 percent between 2021 and 2024. Following this, the United States emerged as a major supplier of UK energy resources. However, the growing trade share of the United States was broader based. The United States also gained share of UK transportation equipment, chemicals, and electronics trade, with this shift persisting through 2024. In chemicals, the UK share of trade with Germany fell the most—by about five percentage points between 2017 and 2024—with share decreases across all subsectors, such as pharmaceuticals, organic chemicals, and plastics.
The decline in Germany’s share of UK chemicals trade was part of a more general trade slowdown between the two largest economies in the Europe 30. Indeed, the trade corridor between the United Kingdom and Germany was one of only a handful of the 435 intra–Europe 30 corridors to shrink in value between 2017 and 2023. It shrank by the most, by about 14 percent or $16 billion, in this period, and the available 2024 data suggest that a recovery is not yet under way.11 UK trade often reoriented to other partners in Europe, such as France, Ireland, and Poland. As a result, the United Kingdom’s overall share of trade with European partners remained broadly stable and substantial. The Europe 30 economies together accounted for 57 percent of UK goods trade in both 2017 and 2024.12
Overall, trade between the United Kingdom and China has remained roughly constant, with pronounced sector shifts. China’s share of UK trade in 2023 and 2024 was similar to prepandemic levels. However, China gained share in some sectors in those years, including in chemicals and machinery, but lost share in others. For example, in electronics—particularly telecommunications equipment and office machinery—China lost share of UK imports to India and the United States. And with the reconfiguration following the invasion of Ukraine, China lost share of UK energy exports, which were increasingly directed to countries in Europe. However, as seen in Germany and many other economies, UK imports of transportation equipment, such as EVs, from China surged more than fourfold, from $1.5 billion to $7 billion between 2017 and 2023. Economies such as Japan and South Korea lost share in this sector.
India’s trade expanded across the geopolitical spectrum
India’s trade has expanded across the geopolitical spectrum. Some shifts stand out. In the case of energy resources, the share sourced from Russia has soared from only about 1 percent in 2017 to almost 30 percent in 2024. At the same time, India’s share of trade with the United States and the Europe 30 has been stable or increasing, fueled by India’s exports to these economies. Their value increased by an annualized 8 and 9 percent, respectively, in this period. In the case of India’s exports of electronics, the share headed for the Europe 30 and the United States rose from less than 40 percent in 2017 to close to 65 percent in 2024.
India’s trade evolution with China has been powered by rising imports from China, which increased in value by about 6 percent a year on average between 2017 and 2023. This was driven by chemicals (including pharmaceuticals) and machinery, which grew by about 10 percent a year. Some notable items include microprocessors, memory chips, and semiconductor manufacturing equipment. India’s imports of these items from China grew tenfold between 2017 and 2023, rising from a combined import value of less than $500 million to $5 billion, with the upward trajectory appearing to continue through 2024. By contrast, each year fewer of India’s exports head to China. Indeed, the dollar value of India’s exports to China fell by 2 percent a year on average between 2017 and 2023. The net effect of these two shifts—rising imports from China but falling exports to China—has been to reduce China’s share of India’s trade between 2017 and 2024 (Exhibit 13).
These shifts may suggest an emerging asymmetrical trade relationship between the world’s two largest developing economies, in which India increases imports from China but exports less to it. India may be developing increasing upstream dependence on imports from China for the goods that then head to markets such as the United States and the Europe 30.
