German Media: China's Exports Surge in May — Could Chips Reshape Trade Dynamics?

New official data shows that China's export growth accelerated in May, with a year-on-year increase of 19.4%. Despite the impact of the Iran conflict, exports of technology-related products remained strong. However, signs indicate that the overseas importers' "stockpiling surge" is now fading.

Driven by the global artificial intelligence (AI) boom, demand for chips, automobiles, and other high-tech products has surged, fueling faster export growth in China during May.

Data released by China Customs on Tuesday, June 9, showed that exports rose 19.4% year-on-year in May—higher than April’s 14.1% increase. Imports also grew by 27.4% year-on-year in May, outpacing April’s 25.3% rise.

Lynn Song, Chief Economist for Greater China at ING, told the Associated Press: "Under the momentum of the global tech boom, demand for ships, chips, automobiles, and batteries remains robust; meanwhile, rising prices along the technology supply chain have also supported trade volume growth."

Reuters analysis suggests that the surge in global AI investment has offset potential export disruptions China might otherwise face due to Middle East instability. Nevertheless, signs point to a fading stockpiling wave triggered by rising energy costs: as prices climb, overseas buyers are holding back, waiting to see how the situation evolves, and instead drawing down their inventories.

Xing Zhaopeng, Senior China Strategist at ANZ Bank, said: "Continued chip price increases continue to support exports—memory chip prices rose 20% month-on-month, driving a 111% increase in integrated circuit exports for the month."

Data shows that exports of automatic data processing equipment rose 66.1% year-on-year, high-tech product exports increased by 50.9%, and car exports surged 39%. Xing added: "Looking ahead, the impact of AI is far from over—chips are reshaping China’s trade landscape."

Traditional Manufacturing Struggles to Recover

However, outside the AI sector, other industries in China are showing signs of weakness, suggesting that the growth momentum may be waning. Furniture exports grew only 1.9% year-on-year in May, toy shipments fell 7%, and shoe exports declined by 10.4%.

A factory activity report cited by Reuters revealed that new export orders in May dropped sharply compared to April. In April, Chinese manufacturing saw new orders reach a two-year high, driven by overseas factories rushing to stockpile amid expectations of supply shortages.

The strong export performance helped push China’s economy to outperform expectations in the first quarter.

Source: DW

Original article: toutiao.com/article/1867572427855884/

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