Source Credit : Portfolio Prints
China’s export growth accelerated sharply in April as manufacturers rushed to fulfill surging orders from artificial intelligence-related industries and overseas buyers stockpiling components amid fears the Iran war could drive global input costs even higher.
The strength in exports, which has pushed China’s trade surplus with the United States to $87.7 billion so far this year, is likely to come under intense scrutiny next week as U.S. President Donald Trump travels to Beijing for a high-stakes leaders’ summit expected to build on last year’s fragile trade truce.
Although Chinese exporters have so far weathered the fallout from the Middle East conflict, economists warn that a prolonged war and persistently high energy prices could eventually weaken global demand — leaving China’s sluggish domestic consumption unable to compensate for the slowdown.
For now, investors and policymakers are closely monitoring the momentum of the AI-driven manufacturing boom and whether exports tied to semiconductors, data infrastructure and advanced industrial equipment can continue powering China’s trade engine.
“The conflict in the Middle East boosted global demand for manufacturing inventory replenishment, while the ongoing semiconductor upcycle kept both imports and exports strong,” said Xing Zhaopeng, senior China strategist at ANZ.
“There is still room for expansion in this AI-driven manufacturing cycle, and annual export growth could reach around 10%,” he added.
Exports rose 14.1% in April from a year earlier in U.S. dollar terms, according to customs data released Saturday, far exceeding the 2.5% growth recorded in March and beating economists’ forecasts for a 7.9% increase.
Separate factory activity data released last month showed new export orders climbed to their highest level in two years, signaling continued resilience in overseas demand despite rising geopolitical uncertainty.
Imports also posted another strong month, rising 25.3% year-on-year after surging 27.8% in March. Economists had expected import growth of 15.2%.
The stronger trade performance pushed China’s monthly trade surplus to $84.8 billion in April, up sharply from $51.13 billion in March.
China’s broader economic momentum remained relatively solid in the first quarter, with gross domestic product expanding 5% from a year earlier — the upper end of the government’s official annual growth target — reducing pressure for immediate large-scale stimulus measures.
Still, even China’s export-heavy manufacturing sector is not immune to the broader economic fallout from rising fuel and transportation costs caused by the Iran war and the disruption of shipping routes through the Strait of Hormuz.
Factory survey data released last month showed input costs remained elevated, particularly for refined petroleum products, coal, chemicals and industrial materials.
At the same time, unemployment has edged higher and retail sales — a key measure of consumer demand — continue to lag behind industrial production, underscoring persistent weakness in the domestic economy.
Trump is scheduled to meet Chinese President Xi Jinping during his May 14-15 visit to Beijing as both countries seek to stabilize a relationship strained by disputes over trade, Taiwan and the Iran conflict.
The U.S. president is expected to push for additional trade concessions from Beijing ahead of November’s midterm elections, although executives and analysts remain skeptical that the summit will produce major breakthroughs.
Facing U.S. tariffs that briefly climbed into triple-digit territory last year, many Chinese exporters aggressively expanded into alternative markets including South America and Southeast Asia by cutting prices and offering favorable financing terms.
Those efforts helped China post a record trade surplus of $1.2 trillion in 2025, reinforcing the country’s position as the world’s dominant manufacturing exporter despite mounting geopolitical and economic pressures.
