China May exports up 19.4% on AI demand, $105B surplus

China's exports grew at a faster-than-expected pace in May, rising 19.4 percent from a year earlier, according to customs data released on Tuesday. Imports also accelerated, climbing 27.4 percent year-on-year, resulting in a monthly trade surplus of $105.43 billion.

The strong export performance, which improved from a 14.1 percent increase in April, was driven by robust global demand for semiconductors and artificial intelligence-related hardware. Analysts noted that shipments were further supported in recent months by overseas buyers stockpiling goods to preempt potential supply chain disruptions and energy cost increases stemming from the ongoing conflict in the Middle East. South Korea's semiconductor exports to China, a key indicator of demand, reportedly surged in May.

Despite the strong headline figures, separate data for May indicated a sharp month-on-month drop in new export orders for Chinese factories, following a two-year peak in April. Economists suggest this signals that the boost from front-loaded orders may be fading as foreign inventories are drawn down. The sustainability of export growth is therefore uncertain, with analysts warning that the positive effects of...