China's exports rose sharply in May, boosted by overseas buyers rushing to place orders ahead of Gulf war energy costs and strong demand for semiconductors and AI hardware, reported Reuters.

Customs data showed exports expanded 19.4 percent year-on-year in US dollar terms, beating April's 14.1 percent gain and economists' forecast of 15 percent. Imports also climbed 27.4 percent, compared with 25.3 percent in April.

Economists warned that the Middle East conflict's impact may yet weigh on shipments as stockpiling peaks, costs rise, and buyers run down inventories while awaiting a ceasefire. Factory activity data revealed a steep drop in new export orders from April's two-year high.

Strong exports helped China's US$20 trillion economy beat forecasts in the first quarter, but momentum has slowed, raising concerns that weak domestic demand leaves it vulnerable to global headwinds and in need of further policy support.

International critics urged Beijing to boost consumption, warning that its reliance on imported inputs and re-exports distorts trade and squeezes emerging economies. The OECD stated that nearly 60 percent of Chinese firms' market share gains stem from subsidies.

A US Federal Reserve paper noted that China's trade surplus has exceeded 1 percent of global GDP, surpassing Japan and Germany's late 20th-century peaks, signaling persistent industrial overcapacity that could reshape manufacturing worldwide.

A meeting last month between US President Donald Trump and President Xi Jinping eased tensions but yielded no breakthroughs on tariffs or cooperation to end the Iran conflict.