China’s export engine, long a pillar of the global economy, is showing clear signs of strain as new trade data for August 2025 reveals a marked slowdown. According to fxempire, China’s total export value rose by just 4.4% compared to the same period last year—a sharp decline from July’s 7.2% growth. Imports also lagged, climbing only 1.3% in August, down from 4.1% the previous month. This latest export growth figure is the slowest since January 2025, underscoring mounting challenges for the world’s second-largest economy.
Economists had hoped for more robust numbers, expecting exports to rise by 5% and imports by 3%. Instead, the data paints a picture of weakening demand for Chinese goods, particularly as the effects of pre-tariff stockpiling fade and the impact of American tariffs becomes more pronounced. The August figures closely mirror recent manufacturing PMI readings. Notably, China’s manufacturing PMI edged up from 49.5 in July to 50.5 in August, just surpassing the neutral 50 threshold. Yet, the improvement masks a worrying trend—new export orders have declined for the fifth consecutive month, signaling persistent softness in external demand even as overall new orders are buoyed by a recovery in overseas services demand.
“Export growth could slow to just 2-3% in the third quarter of this year, and might fall to only 1% in the final quarter,” warned Alicia Garcia Herrero, Chief Economist for Asia-Pacific at Natixis, as reported by fxempire. She added, “Low-value items that are easy to manufacture elsewhere—such as furniture, clothing, footwear, and toys—will be hit hardest. Some bicycle shipments initially destined for the US have already been sold cheaply on Chinese e-commerce platforms.”
The shifting trade landscape is also being shaped by moves from China’s Southeast Asian neighbors. Vietnam, for instance, has recently signed a trade agreement with the United States, agreeing to impose a steep 40% tax on transshipped goods. This measure could further dampen demand for Chinese exports routed through Vietnam. Meanwhile, Indonesian goods now face a 19% tax when entering the US market, adding another layer of complexity to regional trade flows.
Financial markets responded swiftly to China’s disappointing trade data. The Hang Seng Index in Hong Kong initially surged to 25,545 immediately after the report’s release, before retreating to a low of 25,435. By the morning of September 8, 2025, it had rebounded 0.38% to 25,515. The reaction among mainland Chinese stocks was less optimistic: the CSI 300 index slipped by 0.26%, while the Shanghai Composite Index edged down by 0.09%. Currency markets also felt the tremors. The Australian dollar, which is highly sensitive to Chinese economic news due to Australia’s trade dependence, dropped from 0.65674 USD to a low of 0.65546 USD after the data was published, before recovering to 0.65624 USD later that morning. With China accounting for a third of Australia’s exports and trade making up more than half of Australia’s GDP, the ripple effects of China’s trade performance are felt far and wide.
Meanwhile, Vietnamese enterprises are seizing new opportunities amid the global supply chain shakeup. As of September 8, 2025, Vietnam has signed 17 free trade agreements, providing access to nearly 60 economies and covering about 90% of global GDP, according to recent reports. Ho Chi Minh City, Vietnam’s economic powerhouse, has been particularly proactive. The city boasts a network of 66 industrial parks and export processing zones spread over more than 28,000 hectares, supported by modern, synchronized transport and industrial infrastructure.
Ho Chi Minh City is not resting on its laurels. In the first half of 2025 alone, the city’s Trade Promotion and Investment Center organized 75 trade and investment promotion activities, from international exhibitions to market research and networking with foreign distributors. According to Mr. Tran Phu Lu, Director of the Ho Chi Minh City Trade Promotion and Investment Center, “The city has been actively issuing policies to support enterprises in digital transformation, encouraging the adoption of modern production technologies tied to green and circular production models. This helps raise the competitiveness and standing of export goods on the international stage.”
Recognizing that participation in global supply chains demands more than just infrastructure, Ho Chi Minh City is pushing ahead with reforms to streamline its political and administrative apparatus. The goal: improve efficiency, reduce bureaucratic hurdles, and open up new development space for businesses. The city is also encouraging local enterprises to innovate, increase added value, build their own brands, and leverage e-commerce platforms to reach global markets. “To support businesses in deepening their integration into global supply chains, it’s essential to strengthen support for the business community, enabling the production of high-quality, competitive goods and services,” Mr. Tran Phu Lu emphasized.
These efforts are timely. The world economy is in flux, with global supply chains shifting in response to technological change, geopolitical tensions, climate challenges, and rising protectionism. According to local experts, Ho Chi Minh City is positioning itself to become a modern, multi-centered super metropolis with sustainable development and competitiveness at both the regional and global levels. “To capitalize on opportunities and overcome challenges, close coordination is needed between the government, businesses, and trade promotion organizations, both domestically and internationally,” said Ms. Ho Thi Quyen, a local trade expert. The city is working to improve its business environment, simplify procedures, and help enterprises comply with international standards, all while encouraging a shift from contract manufacturing to brand building and direct market engagement.
Support for Vietnamese exporters is not just local. The Ministry of Industry and Trade, in partnership with the Ho Chi Minh City People’s Committee, recently organized the 2025 Export Forum on the theme of “Connecting International Goods Supply Chains.” Mr. Ta Hoang Linh, Director of the Foreign Market Development Department at the Ministry, explained that the event offers Vietnamese companies a chance to keep abreast of market trends, consumer preferences, and new export regulations. At the same time, foreign buyers and distributors gain insights into Vietnam’s production capabilities and supply potential.
Back in Beijing, policymakers are under pressure to respond to these shifting dynamics. The opening of the 20th National Congress of the Chinese Communist Party on September 8, 2025, has stoked expectations of new stimulus measures aimed at shoring up growth. Investors and analysts alike are also awaiting key inflation data—specifically, the Consumer Price Index (CPI) and Producer Price Index (PPI)—due for release on September 10, 2025. These figures are expected to shed light on the impact of weak external demand and intensifying price competition, with the specter of deflation looming over Chinese manufacturers and risk assets alike.
As China’s export momentum slows and regional players like Vietnam adapt to new realities, the global trade landscape is entering a period of recalibration. The coming weeks, with crucial policy meetings and economic data releases, will be pivotal in determining how Asia’s economic giants navigate the headwinds of protectionism, shifting supply chains, and evolving consumer demand.
