China’s Exports Surge Tops Forecasts as AI Propels Booming Trade

qc4e)7mhcu6t5(2v5{06zuni_media_dl_1.png Chinese customs

Article content

(Bloomberg) — China’s exports and imports expanded at a faster pace in May, topping forecasts as booming demand for artificial intelligence hardware offsets disruptions from the war in Iran.

Article content

Exports jumped more than 19% from a year earlier, the most in three months, according to a statement released by the General Administration of Customs on Tuesday. That compares with the median forecast of 15% in a Bloomberg survey of economists and a gain of 14.1% in April. 

Article content

Article content

Article content

Imports soared over 27% in May, leaving a trade surplus of $105.4 billion, the biggest since January. 

Article content

Article content

The global AI infrastructure buildout has emerged as a key force propelling Asian trade this year despite a global energy crisis stemming from the conflict in the Middle East. It’s leading to a huge windfall for companies like the South Korean giant Samsung Electronics Co. as well as lesser-known Chinese hardware suppliers such as Zhongji Innolight Co., a maker of optical modules critical to data centers. 

Article content

Chinese imports also climbed as companies load up on foreign chips and equipment. South Korea’s semiconductor exports to China jumped over 200% in May from a year earlier.

Article content

The AI boom is driving K-shaped expansion across China’s trade, factory production and industrial profits. In April, semiconductors and computers accounted for half of China’s export growth, while traditional products like clothing flat-lined. 

Article content

The divergence complicates China’s economic policymaking, as a large portion of the economy is still suffering from anemic consumer demand, even as some factories in AI-related fields prosper. 

Article content

Article content

The export strength is potentially making Chinese authorities more comfortable with a stronger yuan. In contrast to labor-intensive products, high-tech exports are less sensitive to domestic currency appreciation. 

Article content

With the cost of oil, chips and metals sharply on the rise, China’s export prices jumped at their fastest rate in three years in April, a reversal from years of an almost-unbroken contraction. But such increases have yet to spread to most Chinese goods, suggesting intense domestic competition still limits what factories can charge buyers.

Article content

And despite being the world’s biggest oil importer, China is buying far less crude from abroad, with inbound shipments projected to fall to the weakest since 2022.

Article content

(Updates with chart. An earlier version of this story corrected month in second paragraph.)

Article content