China’s exports surge 27% from a year earlier as AI boom drives strong demand
The increase in exports in June was much better than economists expected. In May, exports increased by 19.4% on an annual basis.
In June, imports increased by 36%, stronger than the annual growth of 27.4% in May.
China’s vehicle exports, especially electric vehicles and other technology-related products, have boomed as the rapid adoption of artificial intelligence increases the need for semiconductors and other electronic equipment.
Strength in export production helped offset weakness in domestic spending and investment.
“While growth will likely continue, it is becoming increasingly fragile,” said Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China). Strong shipments in autos and AI-related products will remain driven by global demand and regulatory hurdles, he said.
Policymakers, including those in the United States and Europe, have warned of rising trade deficits with China. To overcome trade barriers such as high tariffs, China is localizing production in regions such as Europe, Li said. China is also exporting more to Southeast Asia, Latin America and Africa. China will announce economic growth data for the April-June quarter on Wednesday. Chinese leaders in March set an annual economic growth target of 4.5% to 5% in 2025, slightly below 5% growth.
Last week, the International Monetary Fund increased China’s annual growth forecast by 0.2 points to 4.6%. However, he stated that he expects the Chinese economy to grow by only 4.1% in 2027.
Chinese leaders are trying to boost consumer spending through a variety of initiatives, including trade subsidies for cars and home appliances. But many ordinary Chinese are feeling the pressure of the slowing economy and are avoiding big-ticket purchases.
