China's exports surged in June, fueled by global chip and auto demand, highlighting reliance on overseas markets as domestic demand falters.
China's exports jumped in June, driven by global demand for chips and automobiles, underscoring reliance on overseas buyers as domestic demand remains weak, reported Reuters.
Customs data showed exports rose 27 per cent year on year in dollar terms, marking their strongest performance in four months. This outpaced May's 19.4 per cent gain and economists' forecast of 18.2 per cent. Imports surged 36 per cent, reaching a five-year high, compared with 27.4 per cent in May.
Analysts indicated that continued export strength, primarily driven by AI, suggests a stronger second half of the year, supported by fiscal spending, mild monetary easing, and easing tensions in the Middle East that could lower oil prices. However, domestic demand remains sluggish, with retail sales flat and fixed asset investment negative.
Auto exports exceeded 1 million units in June for the first time, while integrated circuit shipments reached 32 billion. China's trade surplus widened to US$125.6 billion in June, keeping the country on track for a surplus above $1 trillion for a second consecutive year.
The ratio of exports to total manufacturing sales hit 24 per cent in the first four months of 2026, the highest since China joined the WTO in 2001. Economists warned that this reliance on exports risks heightening trade tensions, particularly with Europe.
Global AI investment is cushioning manufacturers from turmoil in the Middle East, with surging semiconductor prices boosting both export and import values. Imports from South Korea rose 85 per cent and from Taiwan 41 per cent in June. Coal imports also jumped 29 per cent as China reduced oil and gas purchases.
Analysts cautioned that technology exports alone cannot sustain the $20 trillion economy, with GDP growth forecast to slow to 4.5 per cent in Q2 from 5 per cent in Q1.
