Media365
China’s exports surged in June, driven by strong global demand for artificial intelligence (AI) technology, semiconductor products and data centre equipment, offering a much-needed boost to an economy struggling with weak domestic consumption and a prolonged property downturn.
Exports rose 27 per cent year-on-year in US dollar terms in June, the strongest growth in four months, according to customs data released on Tuesday. The rise significantly exceeded economists’ expectations of an 18.2 per cent increase and marked a sharp acceleration from the 19.4 per cent growth recorded in April.
The stronger-than-expected trade performance highlights how Chinese manufacturers have continued to find overseas buyers despite slowing global growth, uncertainty over trade ties with Washington and geopolitical tensions.
AI demand provides a cushion for Chinese manufacturers
A major driver behind the export surge was rising demand for AI-related technology, including chips, computing equipment and data centre infrastructure, as companies worldwide ramp up investments in artificial intelligence.
China customs vice minister Wang Jun said ahead of the data release that global demand for computing data centres and terminal equipment continued to expand.
Imports of semiconductor-related goods also reflected the strength of AI demand. Imports from South Korea, a key chip manufacturing hub, jumped 85 per cent year-on-year in June, while purchases from Taiwan rose 41.1 per cent. Both countries are among the world’s largest suppliers of advanced semiconductor components.
Exporters benefit from early shipments, price cuts
Chinese exporters also benefited from companies in the US accelerating purchases ahead of possible tariff increases later this year.
US retailers reportedly moved forward orders by four to six weeks to build inventories ahead of the Black Friday and Christmas shopping seasons, helping Chinese manufacturers maintain overseas sales.
Aggressive pricing strategies by Chinese exporters also supported demand, particularly as global businesses faced higher costs due to energy market volatility and geopolitical uncertainty.
However, analysts cautioned that the export boost may not fully offset challenges facing the world’s second-largest economy.
Imports surge, trade surplus widens
China’s imports also recorded a sharp rise in June, climbing 36 per cent from a year earlier. It was the strongest increase in five years and surpassed economists’ forecast of a 24 per cent rise.
The jump in imports reflected stronger demand for industrial inputs, including technology components and raw materials.
China’s trade surplus widened to $125.6 billion in June from $105.4 billion in May, highlighting the continued importance of exports in supporting economic growth.
Domestic weakness remains a challenge
While exports have provided a buffer, China’s broader economic recovery remains uneven. A prolonged property market crisis, weak consumer confidence and subdued domestic spending continue to weigh on growth.
Manufacturing activity data for June showed overseas demand was beginning to recover, but factory-gate prices continued to decline as companies cut prices to compete for orders amid higher energy costs linked to geopolitical tensions.
Strong exports helped China’s economy perform better than expected in the first quarter, but growth momentum has slowed in recent months. Economists have warned that reliance on external demand could leave the economy vulnerable if global conditions weaken.
China is scheduled to release its second-quarter gross domestic product (GDP) data on Wednesday, which will provide further clues on the strength of its recovery.
For policymakers in Beijing, the latest trade numbers offer temporary relief, but the bigger challenge remains reviving domestic demand and reducing dependence on exports for economic growth.
