China exports jump 27% in June as AI boom fuels semiconductor demand amid domestic struggles

China's June trade tops forecasts buoyed by AI boom

BEIJING, July 14 (Reuters) - China's exports surged in June, buoyed by demand for chips and data centre computing power to fuel the global AI boom, giving policymakers grappling with how to boost domestic demand in the world's second-largest economy a much-needed buffer. The stronger-than-expected trade performance shows 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 U.S. 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 five-year high. Economists had forecast growth of 24% for June. "Continued export strength, mostly driven by AI, points to a better second half, coupled with a more expansionary policy mix, accelerated fiscal spending and mild monetary easing, as well as a de-escalation of the situation in the Middle East, which will benefit China through lower oil prices," said Xu Tianchen, a senior economist at the Economist Intelligence Unit in Beijing. "But domestic demand remains a drag. Retail sales remain pretty flat and fixed asset investment was negative last month." 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. Global demand for computing data centres and terminal equipment continued to expand, China customs vice minister Wang Jun said ahead of the data release. Imports from South ⁠Korea, a major chip manufacturer, rose 85% from a year earlier last month, the data showed, with purchases from Taiwan, another big semiconductor manufacturer, up 41.1% over the same period. 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. Reporting by Joe Cash and Yukun Zhang; Editing by Jacqueline Wong and Thomas Derpinghaus Our Standards: The Thomson Reuters Trust Principles., opens new tab

The AI boom drove China's 27% export jump in June as AI and the Iran war reshape global trade | Fortune

China's exports accelerated in June, jumping 27% from a year earlier thanks partly to the boom in artificial intelligence, the customs agency said Tuesday. The increase in exports in June was much better than economists had expected. Exports rose 19.4% year-on-year in May. Imports in June surged 36%, better than May's 27.4% year-on-year growth, with analysts attributing the expansion in part due to the Iran war driving up import costs. China recorded a trade surplus of $125.6 billion in June, widening from $105.4 billion in the previous month. "With the rapid growth of AI, our imports and export of products in this field are robust," Wang Jun, vice minister of China's General Administration of Customs, said at a news conference in Beijing. He said trade in electronic components, computer spare parts, and other computing hardware jumped nearly 57% to 5.1 trillion yuan ($760 billion) in the first half of the year. Other products such as AI glasses, AI translating devices, powered exoskeletons and other smart products are also evolving. "Trade values took another big leg up in June," Julian Evans-Pritchard, head of China Economics at Capital Economics, wrote in a note Tuesday. "This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom. But even putting that aside, foreign demand for Chinese goods remains robust." China's exports of vehicles, especially EVs, and other tech-related products have boomed as rapid adoption of AI increases the need for semiconductors and other electronic equipment. The strength in export manufacturing has helped to offset prolonged weakness in domestic spending and investment due to a prolonged downturn in the property industry. In January-June, China's exports climbed 17.6% from a year earlier, while imports jumped 26.6%, according to the customs data. Policymakers including those in the U.S. and in Europe have express alarm over rising trade deficits with China. In order to bypass barriers such as higher tariffs, Chinese businesses have been moving factories to regions like Europe. China has also been exporting more to Southeast Asia, Latin America and Africa. Wang, the customs official, acknowledged the threat from rising trade barriers. "We still face serious risks and challenges in the second half of the year," he said. While China's export growth is likely to continue, it is becoming increasingly fragile, said Wei Li, head of Multi-Asset Investments at BNP Paribas Securities (China). Robust shipments in autos and AI-related items will remain dependent on global demand and regulatory barriers, he said. Exports to Southeast Asia in June surged nearly 35% from a year ago, while those to the European Union and Latin America increased more than 18% and 28%, respectively. Exports to the United States climbed almost 14% from a year earlier. China's shipments to the U.S. have risen in recent months, partly due to declines in shipments a year earlier after President Donald Trump returned to office last year and implemented higher tariffs. China is set to announce its economic growth data for the April-June quarter on Wednesday. Chinese leaders have set an annual growth target of 4.5% to 5% for this year, slightly lower than the 5% growth in 2025. Last week, the International Monetary Fund raised China's annual growth forecast by 0.2 percentage point to 4.6%. But it said it expects China's economy to expand just 4.1% in 2027. Chinese leaders have sought to boost consumer spending through various initiatives, including trade-in subsidies for autos and home appliances. But many ordinary Chinese have been feeling the pressure from a slowing economy and avoiding big-ticket purchases. ___ AP Videographer Borg Wong contributed from Beijing.

China's June exports surge 27% from year earlier as AI demand grows

China's exports accelerated in June, jumping 27% from a year earlier thanks partly to the boom in artificial intelligence, the customs agency said on Tuesday. The increase in exports in June was much better than economists had expected. Exports rose 19.4% year-on-year in May. Imports in June surged 36%, better than May's 27.4% year-on-year growth, with analysts attributing the expansion in part due to the Iran war driving up import costs. China recorded a trade surplus of $125.6 billion in June, widening from $105.4 billion in the previous month. "Trade values took another big leg up in June," Julian Evans-Pritchard, head of China Economics at Capital Economics, wrote in a note Tuesday. "This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom. But even putting that aside, foreign demand for Chinese goods remains robust." China's exports of vehicles, especially EVs, and other tech-related products have boomed as rapid adoption of AI increases the need for semiconductors and other electronic equipment. The strength in export manufacturing has helped to offset prolonged weakness in domestic spending and investment due to a prolonged downturn in the property industry. In January-June, China's exports climbed 17.6% from a year earlier, while imports jumped 26.6%, according to the customs data. Policymakers including those in the US and in Europe have expressed alarm over rising trade deficits with China. In order to bypass barriers such as higher tariffs, Chinese businesses have been moving factories to regions like Europe. China has also been exporting more to Southeast Asia, Latin America and Africa. While China's export growth is likely to continue, it is becoming increasingly fragile, said Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China). Robust shipments in autos and AI-related items will remain dependent on global demand and regulatory barriers, he said. Exports to Southeast Asia in June surged nearly 35% from a year ago, while those to the European Union and Latin America increased more than 18% and 28%, respectively. Exports to the United States climbed almost 14% from a year earlier. China's shipments to the US have risen in recent months, partly due to declines in shipments a year earlier after President Donald Trump returned to office last year and implemented higher tariffs. China is set to announce its economic growth data for the April-June quarter on Wednesday. Chinese leaders have set an annual growth target of 4.5% to 5% for this year, slightly lower than the 5% growth in 2025. Last week, the International Monetary Fund raised China's annual growth forecast by 0.2 percentage point to 4.6%. But it said it expects China's economy to expand just 4.1% in 2027. Chinese leaders have sought to boost consumer spending through various initiatives, including trade-in subsidies for autos and home appliances. But many ordinary Chinese have been feeling the pressure from a slowing economy and avoiding big-ticket purchases.

China's exports ride AI boom as domestic economy struggles

China's exports saw a significant surge in June, driven by global AI demand and auto sales. Imports also jumped considerably, reaching a five-year high according to customs data. This strong export performance is helping China maintain its trade surplus despite domestic demand challenges. Auto exports alone surpassed one million units for the first time in June. The country's economy relies heavily on overseas markets as domestic consumption struggles. China's exports surged in June, buoyed by orders for chips to fuel the global AI boom and automobiles, deepening producers' reliance on overseas buyers as policymakers in the world's No. 2 economy continue to grapple with how to boost demand at home. The stronger-than-expected trade performance keeps China on track to post a surplus topping $1 trillion for a second straight year, with factories sustaining sales despite slowing growth in major economies and trade frictions with Washington. Exports climbed 27% from a year earlier in U.S. dollar ⁠value terms, customs ⁠data showed on Tuesday, their best performance in four months, outpacing the 19.4% gain in May and an 18.2% rise forecast by economists. Imports jumped 36%, compared with a 27.4% gain the month before, a five-year high. Economists had forecast growth of 24% for June. "Continued export strength, mostly driven by AI, points to a better second half, coupled with a more expansionary policy mix, accelerated fiscal spending and mild monetary easing, as well as a de-escalation of the situation in the Middle East, which will benefit China through lower oil prices," said Xu Tianchen, a senior economist at the Economist Intelligence Unit in Beijing. "But domestic demand remains a drag. Retail sales remain pretty flat and fixed asset investment was negative last month." China's monthly car exports topped 1 million for the first time in June, data showed, which risks heightening tensions with partners such as the European Union. Meanwhile, China sold to the world 32 billion integrated circuits. Chinese stocks rallied following the data, with ⁠the blue-chip CSI300 closing up 2%. China's trade surplus came in at $125.6 billion in June, up from $105.4 billion the previous month. The year-to-date trade gap now stands at $575.98 billion versus $585.96 billion last June, despite imports having grown faster than exports for several consecutive months. With policymakers still short of a fix for a protracted property crisis that has weighed on domestic demand ⁠for several years, Chinese manufacturers appear to have few good options beyond selling overseas. The ratio of annual exports to total manufacturing sales hit 24% over the first four months of this year, according to a recent report by Gavekal Dragonomics, a consultancy, the highest level since China's accession to the World Trade Organization in 2001. In 2019, the ratio stood at 18.3%, rising to 22.3% last year. "That would be considered high for a small export-focused country; for the world's second-largest economy, it is remarkable," the report said. "I think exports will remain strong in the second half of the year," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. "Meanwhile, it also puts further pressure on the trade tensions between China and its trading partners, Europe in particular." Chips cushion economy from crimped consumption The surge in global AI investment is helping the world's top manufacturer offset the export hit many had expected from the Middle East turmoil. China also appears to be drawing down energy stockpiles rather than subjecting its producers to higher prices. The world's top energy buyer's June oil imports hit their lowest level since October 2016, according to Reuters calculations. Year-to-date natural gas purchases are also down 3.4% from a year earlier, suggesting China is relying on coal to make up the difference. Coal imports jumped an annual 29% in June. Robust global demand for chips means pockets of the $20 trillion economy will keep humming along while other parts remain in the doldrums. Julian ⁠Evans-Pritchard, head of China economics at Capital Economics, said the strong import figure "should not be taken as evidence that domestic demand is booming." "As with exports, surging semiconductor prices are playing a key role in pushing up import values," he added. Imports from South Korea, a major chip manufacturer, rose 85% from a year earlier last month, the data showed, with purchases from Taiwan, another big semiconductor manufacturer, up 41.1% over the same period. Customs Vice Minister Wang Jun said he was confident the production powerhouse's exports would remain resilient into the second half of the year, despite external pressures, singling out technology exports. 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. The problem is that technology exports alone cannot prop up an entire economy, at least not for long. Sluggish domestic demand is expected to be a drag, with gross domestic product forecast to have grown by just 4.5% year-on-year in April to June, cooling from 5.0% in the first quarter, according to a Reuters poll. GDP data is due to be released on Wednesday.

China's exports surge 27% from a year earlier as AI boom drives strong demand

China's exports jumped twenty-seven percent in June, driven by strong artificial intelligence demand. Imports also surged significantly, reflecting increased global needs for electronics. This export strength helps balance weaker domestic spending and investment within China. Policymakers globally have expressed concerns about trade imbalances with China. China is now localizing production and exporting more to developing regions. Hong Kong: China's exports accelerated in June, jumping 27% from a year earlier, driven by strong demand due to the boom in artificial intelligence, the customs agency said Tuesday. The increase in exports in June was much better than economists had expected. Exports rose 19.4% year-on-year in May. Imports in June surged 36%, stronger than May's 27.4% year-on-year growth. China's exports of vehicles, especially EVs, and other tech-related products have boomed as rapid adoption of AI increases the need for semiconductors and other electronic equipment. The strength in export manufacturing has helped to offset weakness in domestic spending and investment. "While growth is likely to continue, it is increasingly fragile," said Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China). Robust shipments in autos and AI-related items will remain dependent on global demand and regulatory barriers, he said. Policymakers including those in the U.S. and in Europe have warned of elevated trade deficits against China. In order to bypass trade barriers such as higher tariffs, China has been localizing production in regions like Europe, Li said. China has also been exporting more to Southeast Asia, Latin America and Africa. China is set to announce its April-June quarter economic growth data on Wednesday. Chinese leaders in March set an annual economic growth target of 4.5% to 5%, slightly lower than the 5% growth in 2025. Last week, the International Monetary Fund raised China's annual growth forecast by 0.2 percentage point to 4.6%. But it said it expects China's economy to expand just 4.1% in 2027. Chinese leaders have sought to boost consumer spending through various initiatives, including trade-in subsidies for autos and home appliances. But many ordinary Chinese have been feeling the pressure from a slowing economy and avoiding big-ticket purchases.

China's June trade tops forecasts buoyed by AI boom

BEIJING, July 14 (Reuters) - 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 U.S. 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. 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. (Reporting by Joe Cash; Editing by Jacqueline Wong)