China's Trade Transformation: From Goods to High-Tech Services Exports
In 2025, China's exports of telecoms, computer and information services surged to US$118 billion, up 13% year-on-year, while traditional goods like footwear and handbags declined
Quick Look
- China is undergoing a structural trade transformation, shifting from exporting physical goods like footwear and handbags to becoming a major exporter of manufacturing technology and services.
- In 2025, China's exports of telecoms, computer and information services reached US$118 billion, a 13% year-on-year increase, while traditional goods exports declined—footwear fell 9% to US$46 billion and handbags/suitcases dropped 13% to US$30 billion.
- Companies like Guangzhou-based iRootech are leading this shift, exporting industrial AI and computer vision technology to global manufacturers.
AI-generated summary
Why It Matters
For decades, China was known as the world's factory, exporting massive volumes of physical goods like footwear, bags and furniture. This article documents a structural transformation in China's trade profile as it moves toward exporting technology and services.
For decades, the global image of Chinese trade was synonymous with massive container ships loaded with footwear, bags and furniture. However, a profound structural shift is under way. Having conquered the world of physical goods, China is now rapidly ascending the industrial chain as an emerging exporter of manufacturing technology. In 2025, the country's exports of telecoms, computer and information services reached 808 billion yuan (US$118 billion), marking a robust 13 per cent year-on-year increase. It far outpaced export growth in traditional goods, such as footwear, which fell 9 per cent to US$46 billion in the same period, or handbags and suitcases, which saw a collective export decline of 13 per cent to US$30 billion, according to official data. "China's new trade front with the world is the export of services such as information and communication technology, construction management, engineering services, data analytics and research and development," wrote Bank of America chief market strategist Joseph Quinlan in an article published recently in the Financial Times. Guangzhou, Guangdong province-based iRootech is among the growing number of Chinese companies that export its industrial computer vision and artificial intelligence technology. It secured its first foreign client, German concrete machinery maker Putzmeister, in 2017, and has since worked with thousands of companies overseas, said Xiao Tingting, the company's head of global business. It developed a maintenance platform that can remotely manage concrete equipment and predict future malfunctions using artificial intelligence. As a result, it helped the German firm, which does business in more than 30 countries, reduce travel costs related to after-sales service by 25 per cent.
What to Watch
AI outlook — possibilities, not facts
More Chinese companies will expand exports of AI and industrial automation technology to global manufacturers
Very likely · Within years
Traditional goods exports from China will continue declining as production shifts to lower-cost countries
Likely · Within years
Open Questions
- How will this shift affect employment in China's traditional manufacturing sectors?
- What regulatory challenges might Chinese tech companies face in Western markets?
- Will other developing countries benefit from or be displaced by this shift?
