China’s export growth gathered pace last month as factories raced to meet a wave of orders from artificial intelligence (AI)-related industries and other buyers seeking to stockpile components amid fears the Iran war could push global input costs even higher.
That export strength, which has seen China’s trade surplus with the US widen to US$87.7 billion so far this year, should be in focus next week as US President Donald Trump travels to Beijing for a leaders’ summit expected to extend last year’s trade truce.
While Chinese exporters have so far weathered the fallout from the Middle East conflict, economists warn that the longer the war drags on and energy prices rise, the greater the risk that external demand fades away — leaving sluggish domestic consumption unable to plug the gap.
Photo: AFP
Economists are watching the pace of the AI manufacturing boom and whether shipments of related equipment can keep the Chinese export engine purring.
“The conflict in the Middle East pushed up demand for global manufacturing inventory replenishment and under the upward cycle of semiconductors, imports and exports maintained a boom,” Australia & New Zealand Banking Group senior China strategist Xing Zhaopeng (邢兆鵬) said.
“There is still room for expansion in this round of manufacturing cycle driven by AI and it is expected that the annual export growth rate will be about 10 percent,” Xing said.
Exports expanded 14.1 percent from a year earlier in US dollar value terms, customs data showed, outpacing the 2.5 percent gain in March and a 7.9 percent rise tipped by economists.
Imports notched another strong month, climbing 25.3 percent versus 27.8 percent in March. Economists had forecasted growth of 15.2 percent.
That boosted China’s trade surplus last month to US$84.8 billion, from US$51.13 billion in March.
Broader momentum in the Chinese economy was solid in the first quarter, with GDP growth hitting 5 percent year-on-year, the top of the government’s full-year target range.
However, factory data published last month showed input prices remained elevated, particularly for refined goods and petroleum, coal and chemicals. Unemployment rates also edged higher and retail sales — a gauge of consumption — continued to underperform industrial output.
Trump is scheduled to meet Chinese President Xi Jinping (習近平) during his visit this week to Beijing, as both countries seek to stabilize a relationship strained by tensions over trade, Taiwan and the Iran war.
Trump should be keen for trade concessions from Beijing ahead of November’s US midterm elections, although corporate executives and analysts are not expecting big breakthroughs.
Faced with US levies that briefly rose to the triple digits, Chinese exporters last year chased new markets such as South America by offering lower prices. China ended last year with a record trade surplus of US$1.2 trillion.
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