In the first quarter of 2026, China’s foreign trade delivered a seemingly contradictory report card.
The total value of imports and exports of goods trade increased by 15% year-on-year, hitting a new high in the past five years; however, China’s exports to the United States fell by 16.4% year-on-year.
On the one hand, there is strong growth in overall foreign trade, and on the other hand, there is a significant shrinkage in trade with the largest single partner.
Behind this, it is the underlying logic of the start of the 15th Five-Year Plan that is at work.
Facing the “headwinds” of rising global trade protectionism and intensifying geopolitical conflicts, China is hedging external uncertainties through a profound transformation of its opening model. The core of which is to shift from the past “factor flow-based openness” to the “system-based openness” of rules, regulations, management, and standards.
The uncertainty of the external environment is first intuitively reflected in the data.
According to data from the General Administration of Customs, the bilateral trade volume between China and the United States accounted for 8.8% of China’s total foreign trade in 2025, and China’s exports to the United States accounted for 11.1% of total exports, setting a new low this century.
At the same time, the global economic and trade friction index reached a high of 104 in December 2025.
The “friendly shore” and “decoupling” policies promoted by the United States and the West, as well as the abuse of unilateral tools such as the EU’s Foreign Subsidy Regulations, are increasing the fragmentation risk of the global supply chain and the compliance costs of Chinese companies.
However, under pressure, China’s response strategy is not contraction, but a more resilient diversified layout.
The high growth in the first quarter of 2026 is driven by the expansion of emerging markets such as ASEAN, Latin America, and Africa.
Especially since May 1, 2026, China has fully implemented zero tariffs with 53 African countries that have diplomatic relations with China, directly providing new market opportunities for these developing economies.
The fundamental driving force for this reshaping of the trade pattern of “the East is not bright but the West is bright” is the institutional opening-up promoted by China during the “15th Five-Year Plan” period.
Institutional opening up is listed as the core task of independent opening up in the “15th Five-Year Plan”.
It is no longer about simply lowering tariffs and attracting foreign investment (factor flow), but is committed to promoting the “compatibility” of domestic rules, regulations, management, and standards with international high-level rules.
Institutional openness to hedging external risks is mainly achieved through two paths.
Externally, we should enhance our say in rules and expand our “circle of friends.”
Through “test fields” such as the Free Trade Pilot Zone and Hainan Free Trade Port, we will proactively conduct “stress tests” against international high-standard economic and trade rules such as CPTPP and DEPA.
For example, the Qingdao area of the Shandong Pilot Free Trade Zone pioneered the “pre-confirmation of intellectual property status” model and aligned with the CPTPP intellectual property protection provisions, shortening customs clearance time by 20 days.
At the same time, through high-quality joint construction of the Belt and Road Initiative, we will promote mutual recognition of rules and standards with co-building countries and build a closer network of diversified partners.
Internally, openness is used to force reforms and stimulate endogenous motivation.
By aligning with international rules, we will reversely promote in-depth reforms in the domestic business environment, market access, intellectual property protection and other fields.
The Ministry of Commerce has implemented the “National Treatment + Full-cycle Services” project for foreign-invested enterprises, and the National Development and Reform Commission has also adopted a normalized government-enterprise communication mechanism, convening more than 20,000 private enterprise symposiums in 2025 alone.
The goal is to promote the business environment into the top 20 in the world by 2027 and reduce the institutional transaction costs of enterprises by 20%.
The four dimensions of rules, regulations, management, and standards are not empty concepts. They are profoundly changing the economic ecology through concrete practice.
By aligning rules with international standards in areas such as intellectual property and government procurement, foreign-funded enterprises will have a fairer competitive environment, and legal risks such as property rights disputes faced by Chinese enterprises when going overseas will be reduced accordingly.
Regulatory coordination focuses on emerging areas such as the digital economy and green and low-carbon. For example, the Hangzhou area of the Zhejiang Pilot Free Trade Zone is exploring a “list expansion + regional mutual recognition” mechanism for cross-border data flow, which has cleared key obstacles for the development of industries such as artificial intelligence and cross-border e-commerce.
Management innovation, the government has shifted from “heavy examination and approval” to “strong supervision”, and the “credit certificate” service implemented nationwide has replaced more than 44 million certificates of various types, realizing “one report replaces a stack of certificates”.
Standards connectivity promotes China’s superior standards to go global. In fields such as high-speed rail, 5G, and traditional Chinese medicine, China is transforming from a “standards acceptor” to a “standards leader”, which can effectively reduce technical barriers to trade and enhance the added value of “Made in China.”
In the face of this systematic open upgrade, different groups need to focus on different priorities.
If you are an entrepreneur or investor, you need to pay close attention to the latest institutional innovations in each pilot trade zone.
For example, after the island-wide customs sealing operation of the Hainan Free Trade Port, it has provided the highest level of open testing in terms of “zero tariffs, low tax rates” and cross-border capital flows.
Shanghai Pudong Leading Area and Lingang New Area are conducting cutting-edge exploration in areas such as data cross-border and offshore science and technology innovation.
The pioneering policies in these regions may contain huge market opportunities.
If you are a scientific researcher or a high-end service industry practitioner, institutional openness will create a more international environment.
With the deepening of the opening up of the service industry, especially in the fields of telecommunications, medical care, education and other fields, the international flow of professional talents and mutual recognition of qualifications will become more convenient, providing you with a broader career development platform.
If you are an ordinary consumer or entrepreneur, you will benefit from a more optimized business environment and richer market choices.
The threshold for starting a business has been lowered due to the “separation of licenses and licenses” reform, and consumers can enjoy more high-quality goods and services due to diversified import channels and reduced tariffs.
The construction of a unified domestic market will also allow you to enjoy fairer market opportunities no matter where you are.
During the “15th Five-Year Plan” period, the focus of China’s opening-up has shifted from the cross-border flow of goods, capital, personnel and other elements to institutional opening such as rules, regulations, management, and standards. It has shifted from passively adapting to globalization to independently shaping a new paradigm of high-level opening up.
In the final analysis, the institutional opening-up in the “15th Five-Year Plan” is a strategic transformation that puts us first and is proactively planned.
It does not avoid external storms, but enhances its stability and initiative in sailing in an ocean of uncertainty by strengthening its own “institutional keel”.
For all market participants, understanding the underlying logic of this change and proactively adjusting the course will be the key to seizing development opportunities in the next five years.
