Exports climbed 27% from a year earlier — the most in four month — according to data released by the General Administration of Customs on Tuesday. That’s better than the 19% gain projected by economists surveyed by Bloomberg.
Imports surged at the fastest clip in five years and rose 36%, leaving a trade surplus of $125.6 billion — the second-biggest ever.
The race to build out artificial intelligence infrastructure has touched off a new boom cycle for exporters by creating a historic shortage for semiconductors and other electronics. Chip prices have soared as much as 700% over the past year, turbocharging trade from South Korea to Taiwan.
The frenzy has helped shield China from months of war in the Middle East, even as domestic frailty likely meant economic growth slowed near the lower bound of the official target of 4.5% to 5% in the second quarter.
But the AI-led export rush is making the economy more unbalanced and vulnerable to any setback in global demand. In China, the technology is also adding further stress to an already fragile labor market.
Worries over the sustainability of the boom already prompted repeated selloffs in South Korean stocks recently, with chip giant SK Hynix Inc.’s share price plunging by a record 15% on Monday. South Korea’s exports to China climbed 92% in June from a year ago, their fastest pace since 2010.
And as tensions spiral anew over Iran, investors and economists are also watching for changes to China’s oil imports.
The country has begun to play an increasingly vital role in balancing the global oil market, and has significantly reduced foreign purchases in recent months after the war began. Analysts expect crude imports to recover as authorities return to strategic stockpiling later this year.
