China’s exports rebound strongly, led by AI boom
China’s export growth accelerated in April as factories raced to meet a wave of orders from AI-related industries and other buyers looking to stockpile components, amid fears that the Iran war could push global input costs even higher.
This export prowess, which has seen China’s trade surplus with the US rise to US$87.7 billion ($A120.9 billion) in 2026, will be in focus when President Donald Trump travels to Beijing for a leaders’ summit on May 14-15, where he is expected to extend the trade truce into 2025.
Although Chinese exporters have so far recovered from the effects of the conflict in the Middle East, economists warn that the longer the war lasts and energy prices rise, the greater the risk of weakening external demand and stagnant domestic consumption will not be able to close the gap.
For now, economists are monitoring the pace of the explosion in artificial intelligence production and whether shipments of related equipment can rev up China’s export engine.
According to ANZ’s senior China strategist Xing Zhaopeng, “The conflict in the Middle East has increased demand for replenishment of global manufacturing inventory, and there has been a boom in imports and exports under the boom cycle of semiconductors.”
“There is still room for expansion in this AI-driven production cycle, and the annual export growth rate is expected to be around 10 percent.”
According to Saturday’s customs data, exports increased by 14.1 percent in US dollar terms compared to the previous year, surpassing the 2.5 percent increase in March and the 7.9 percent increase predicted by economists.
Separate factory activity data for April showed new export orders rose to a two-year high.
Imports recorded another strong month, up 25.3 percent compared to 27.8 percent in March.
Economists predicted growth would be 15.2 percent.
This increased China’s trade surplus from $51.13 billion in March to $84.8 billion in April.
Overall momentum in the Chinese economy was solid in the first quarter; GDP growth reached five percent on an annual basis, above the government’s full-year target range, and the need for urgent stimulus has diminished.
But even China, long criticized by trading partners for subsidy-supported, cut-price production, is not immune from the hit to buyers’ purchasing power as fuel and transportation costs rise.
Factory data released in April showed input prices remained high, especially for refined products, oil, coal and chemicals.
Unemployment rates also rose, and retail sales, an indicator of consumption, continued to underperform industrial production.
Trump is scheduled to meet with Chinese President Xi Jinping during his visit to Beijing on May 14-15, as both countries try to stabilize relations strained by trade, Taiwan and the Iran war.
