China’s trade surges on booming global AI demand despite US tensions

China’s exports and imports recorded strong growth in July, driven by rising global demand for artificial intelligence (AI)-related technology products, according to official data released on Friday.

The figures highlight the resilience of the world’s second-largest economy, whose manufacturing sector continues to benefit from strong overseas demand despite sluggish domestic consumption and ongoing trade tensions with the United States.

Data released by China’s General Administration of Customs (GAC) showed that exports rose by 23.9 per cent year-on-year in July, exceeding Bloomberg’s forecast of 23.0 per cent.

The growth was fuelled by increased international demand for Chinese data-processing equipment and other technology components used in expanding AI infrastructure worldwide.

AI boom boosts technology exports

According to the customs data, exports of computers and related components increased by 45.2 per cent during the first seven months of the year.

Analysts said the rapid expansion reflects the global race among businesses to build AI capabilities.

Economist Mr. Julian Evans-Pritchard of Capital Economics said export and import values remained strong due to sustained demand for electronics and green technology products.

China’s trade surplus reached $687 billion by the end of July, putting the country on track to match last year’s record trade surplus of nearly $1.2 trillion.

Growing concerns over trade imbalance

China’s widening trade surplus has continued to attract criticism from several trading partners, particularly in Europe, where policymakers have expressed concern that an influx of Chinese products could undermine local manufacturers.

However, Beijing has consistently maintained that it does not deliberately pursue a trade surplus.

Last month, the ruling Communist Party’s Politburo, led by President Xi Jinping, called for a more balanced approach to trade development.

Imports remain strong

China’s imports also recorded significant growth, rising 27.5 per cent in July.

Although the increase fell below June’s 36 per cent growth and Bloomberg’s forecast of 29.5 per cent, it reflected continued resilience despite weak domestic demand indicators.

President and Chief Economist at Pinpoint Asset Management, Zhiwei Zhang, said export growth continued to support China’s economy.

He added that further negotiations with major trading partners would likely focus on achieving more balanced trade relationships.

China-US trade tensions persist

The latest trade figures come against the backdrop of renewed friction between China and the United States.

Chinese exports to the United States increased by 17 per cent year-on-year in July, bringing China’s trade surplus with the US to nearly $171 billion for the year through the end of July.

Earlier this week, Beijing imposed new restrictions on drone exports to the United States and placed six American companies on its blacklist after Washington introduced sanctions linked to allegations of forced labour and national security concerns.

Although both countries agreed to a truce after US President Donald Trump met with President Xi Jinping in October last year, trade relations remain under close scrutiny.

The relationship is expected to receive renewed attention ahead of Mr. Xi’s scheduled state visit to the United States later in September, where trade and economic cooperation are expected to dominate discussions.