China's Exports Surge, Driven by AI Demand

China's exports experienced a substantial surge in September, largely supported by the global and domestic artificial intelligence (AI) upcycle. Government figures reveal that exports grew by 36.3% year-on-year, reaching $447.18 billion. This marks the largest monthly rise since 2021, when trade figures were distorted by the effects of the COVID-19 pandemic.

Highlights

• Exports in September increased by 36.3% year-on-year to $447.18 billion.
• Tech-related trade led the growth, with semiconductor exports surging over 108% and automatic data processing machine shipments jumping nearly 55%.
• Imports also saw a 31% increase year-on-year in September.
• The Association of Southeast Asian Nations (ASEAN) was China's largest export market, with exports rising over 52% to $81.7 billion.
• HSBC economist Taylor Wang noted that high-tech demand and China's supply-chain competitiveness sustained the momentum.

Details

According to figures from the General Administration of Customs, exports accelerated from a 25% gain in August. Imports also increased, rising to 31% in September from 28.2% in August. For the first nine months of the year, total exports grew 21.3% to $3.37 trillion, while imports gained 27.5% to $2.43 trillion, resulting in a trade surplus of $938.1 billion.

ASEAN emerged as China's largest export market by a significant margin, with exports to the region rising over 52% to $81.7 billion in September. Exports to the European Union increased by 25.3% to $60.15 billion, and shipments to the United States jumped 39.6% to $47.88 billion.

Why it matters

This robust export growth provides a crucial boost to China's economy amidst challenges such as slowing growth and weak domestic consumption. The International Monetary Fund (IMF) projects China's economy to grow 4.5% in 2026. Lynn Song, chief economist for Greater China at ING, stated that the strong export growth should help China achieve its 4.5-5% growth target, though he also noted that growth remains unbalanced and requires rebalancing in the medium term.