Global Economics Comment: More Chinese Exports, Fewer Chinese Imports, Lower Global Inflation

Research evidence excerpt

Global Economics Comment: More Chinese Exports, Fewer Chinese Imports, Lower Global Inflation

Economics Research

26 July 2026 | 4:00PM BST

Global Economics Comment: More Chinese Exports, Fewer Chinese

Imports, Lower Global Inflation

n Chinese exports to non-US DMs have grown rapidly since the pandemic, Megan Peters

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reflecting both trade reallocation away from the US and overall export strength. megan.l.peters@gs.com

Goldman Sachs International

At the same time, Chinese imports from the rest of the world have pulled back

amid an increased push for self-sufficiency. In this Global Economics Comment, we

check in on how these shifting trade patterns are affecting inflation.

n Leveraging a harmonized cross-country trade-inflation panel, we find that each

1pp increase in Chinese exports to other countries (as a share of total

consumption in the recipient countries) since 2024 is associated with a 0.5%

decline in goods prices. On average, we estimate this channel has lowered goods

prices by 0.6% across non-US DMs so far.

n Using the same harmonized panel, we find that for a country-product pair with

complete import dependence, a 1pp decline in China’s share of global imports of

that product would lower prices by 1.3%. This channel implies a modest

incremental drag of around 0.1% on realized goods prices.

n Combined, our analysis suggests that these dynamics have lowered goods prices

by 0.7% across non-US DMs over the last two years—corresponding to a

0.1-0.2pp drag on annual headline and core inflation in DMs—with larger effects

in Japan (1.1%) and the Euro area (1.0%). We expect these effects to build

moving forward, both because realized trade shifts will take time to fully pass

through to consumer prices, and because our China economics team expects the