China's June trade tops forecasts buoyed by AI boom
- Imports jumped 36%, compared with a 27.4% gain a month prior, a 5-year high
China's June exports surged past forecasts, driven by strong AI-related tech demand and manufacturers rushing U.S. shipments ahead of potential tariffs, despite global economic uncertainties.
- Strong demand for AI-related technology products.
- Manufacturers rushing U.S.-bound shipments before new tariffs.
- Aggressive pricing strategies by Chinese exporters.
BEIJING: China’s export growth topped forecasts in June as strong demand for semiconductors and a rush by manufacturers to ship goods to the U.S. ahead of potential new tariffs countered broader concerns about the Iran war and weakening global demand.
The stronger-than-expected trade performance suggests Chinese manufacturers continued to sustain sales despite slowing growth in major economies and uncertainty over trade relations with Washington.
Strong demand for AI-related technology products, front-loading of U.S.-bound shipments and aggressive pricing by Chinese exporters helped support overseas sales.
Exports climbed 27% from a year earlier in US dollar value terms, customs data showed on Tuesday, their best performance in four months, outpacing the 19.4% gain in April and an 18.2% rise forecast by economists.
Imports jumped 36%, compared with a 27.4% gain a month prior, a 5-year high. Economists had forecast growth of 24% for June.
Global AI investment is providing an important cushion for manufacturers in China’s $20 trillion economy, even as disruption from the Middle East conflict and a prolonged property slump continue to weigh on broader growth.
Separate manufacturing activity data for June, released late last month, showed overseas demand was beginning to recover, but factory-gate prices continued to fall as companies cut prices to win business from customers squeezed by higher energy costs linked to the Iran conflict.
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Chinese exporters got a boost as U.S. retailers brought forward orders by four to six weeks to stock up for Black Friday and Christmas sales ahead of expected tariff hikes later this year. Uncertainty remains high, however, after U.S. President Donald Trump’s May visit to Beijing failed to deliver the breakthroughs many had hoped for.
Strong exports helped propel the economy past expectations in the first quarter, but momentum has since cooled, reinforcing economists’ concerns that weak domestic demand leaves China exposed if external conditions soften, raising the prospect of further policy support.
China will publish its GDP figure for the second quarter on Wednesday.
China’s trade surplus came in at $125.6 billion in June, up from $105.4 billion a month prior.