China”s export sector, driven by surging global demand for high-tech products, is expected to remain robust in the second half, which will provide strong support for the country’s economic growth, senior economists said.
The recent thaw in trade relations between China and the United States could also help improve market expectations and reduce uncertainty over external demand in the months to come, they added.
China’s export sector is displaying “remarkable resilience”, driven by a global artificial intelligence investment boom and a sustained energy super-cycle, with Chinese firms well-positioned to capture growing global market share in relevant fields, said Robin Xing, chief China economist at Morgan Stanley.
Xing said global capital spending on AI hardware continues to expand, and Chinese firms have developed “core competitiveness” in printed circuit boards, optical components and memory chips, allowing them to share in the sector’s upside.
China’s integrated circuit exports have entered a phase of rising volumes and prices, with monthly export value growth exceeding 20 percent for 13 consecutive months as of April, said the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.
Gao Shiwang, a spokesperson for the chamber, said that in the first four months, integrated circuit export volume rose 10.6 percent, while the value of exports jumped 78.3 percent. April alone saw a 92 percent year-on-year increase in export value.
“China’s mature manufacturing and supply chain capabilities give it a unique position in the global AI hardware ecosystem. We are not only a major producer, but also a vital link in the value chain,” Gao said.
On the energy front, Xing said large AI data centers require massive amounts of electricity, and China has taken “a leading position” in the global energy transition from wind and solar components to grid equipment and storage batteries.
The General Administration of Customs said exports of electric vehicles surged 68.1 percent year-on-year in the first four months, while lithium battery exports rose 43.2 percent and wind power generation equipment climbed 40.7 percent.
After weathering the COVID-19 pandemic, geopolitical conflicts, trade frictions and energy shocks, China’s supply chain resilience has won global recognition, and global capital looking to invest in AI hardware and the energy transition would find it hard to bypass China, Xing added.
Guan Tao, global chief economist at BOCI China, said China’s export strength, especially in high-tech sectors, will be a “key stabilizer for growth” in the second half.
Guan said robust exports are driving industrial production and manufacturing investment, while imported inflationary pressures are also helping to improve the country’s price trajectory — factors that could push economic performance above expectations.
The easing of trade tensions between Beijing and Washington after US President Donald Trump paid a state visit to China in mid-May could also lower the uncertainty that weighed on China’s export sector and US businesses alike, experts said.
“Cooperation with the US helps reduce external uncertainties for China, which greatly contributes to the stability of the Chinese economy,” said Zhu Min, former deputy managing director of the International Monetary Fund.
“For the US, working with China is beneficial to its economic development and helps boost its demand. Especially in a year marked by so much uncertainty, we are introducing a factor of certainty, which carries great significance,” Zhu said.
However, Guan from BOCI China warned of the external uncertainty still remaining in the second half due to situations in the Middle East.
“Currently, the Middle East is in a state of neither war nor peace,” Guan said. “If the conflict escalates or the blockade of the Strait of Hormuz is prolonged, the resulting energy supply disruptions and international logistics blockages will have an increasingly severe impact on the global economy and trade.”
“If the global economy falls into recession, China will not be immune,” he added.
