China

Analysts believe advanced semiconductors and electric vehicles will continue to drive export growth for the remainder of the year.

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China’s exports picked up pace in May, rising 19.4 per cent from a year earlier, its customs agency said Tuesday, as technology-related shipments remained robust despite impacts from the Iran war.

The stronger than expected performance was an improvement from April’s 14.1 per cent year-on-year increase.

Imports in May jumped 27.4 per cent, also at a faster pace compared with April’s 25.3 per cent year-on-year expansion.

Exports to the US in May surged more than 35 per cent from the year before – the strongest pace since early 2021 – after an 11 per cent increase in April.

China’s shipments to the US had fallen sharply for most of the months since US President Donald Trump returned to the White House last year, as shipments to regions like Southeast Asia and Europe surged.

The strength in exports has been supported by shipments of autos and technology and artificial intelligence-related products such as semiconductors and computing equipment.

Exports are a “shock‑absorber” for China, helping its economy weather a spike in global energy prices that have driven inflation worldwide, said Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China).

The global AI boom and a rising worldwide shift to green technology are also helping.

“Ships, chips, autos, and batteries continue to find strong demand amid the global tech boom, and higher prices along the tech supply chain have helped support the value growth for trade,” said Lynn Song, chief economist for Greater China at Dutch bank ING.

By product categories, overall exports of semiconductors in May more than doubled year-on-year by value while autos were up almost 40 per cent. China’s biggest electric vehicle maker BYD said it sold more than 160,600 vehicles abroad in May, up 80 per cent from a year earlier.

Advanced semiconductors and EV shipments are likely to help power China’s export growth for the rest of this year, Li of BNP Paribas said.

Trump’s visit to Beijing in May and his meetings there with Chinese President Xi Jinping in mid-May have raised hopes for improved relations between the world’s two largest economies after the two leaders agreed to set up boards of trade and investment.

But analysts said the recent year-on-year improvement in Chinese exports to the US probably has more to do with base effect, after Trump’s sweeping “Liberation Day” tariffs that came into effect in April 2025 caused a sharp drop in China’s shipments.

Chinese leaders have set a 4.5 per cent to 5 per cent annual economic growth target for 2026, slightly below the “around 5 per cent” goal for 2025, and the slowest expansion goal since 1991. ING’s Song said a strong start to the year should help China stay on track to meet its full-year growth target.

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