China’s export growth gathered pace in April as factories raced to meet a wave of orders from AI-related industries and other buyers seeking to stockpile components amid fears the Iran war could push global input costs even higher.
That export strength, which has seen China’s trade surplus with the US widen to $US87.7 billion ($A120.9 billion) in 2026, will be in focus as President Donald Trump travels to Beijing for a leaders’ summit on May 14-15 that is expected to extend 2025’s trade truce.
While Chinese exporters have so far weathered the fallout from the Middle East conflict economists warn that the longer the war drags on and energy prices rise, the greater the risk that external demand fades away – leaving sluggish domestic consumption unable to plug the gap.
For now economists are watching the pace of the AI manufacturing boom and whether shipments of related equipment can keep the Chinese export engine purring.
“The conflict in the Middle East pushed up demand for global manufacturing inventory replenishment, and under the upward cycle of semiconductors, imports and exports maintained a boom,” according to Xing Zhaopeng, senior China strategist at ANZ.
“There is still room for expansion in this round of manufacturing cycle driven by AI, and it is expected that the annual export growth rate will be about 10 per cent.”
Exports expanded 14.1 per cent from a year earlier in US dollar value terms, customs data showed on Saturday, outpacing the 2.5 per cent gain in March and a 7.9 per cent rise tipped by economists.
New export orders rose to their highest level in two years, separate factory activity data for April showed.
Imports notched another strong month, climbing 25.3 per cent versus 27.8 per cent in March.
Economists had forecast growth of 15.2 per cent.
That boosted China’s trade surplus in April to $US84.8 billion, from $US51.13 billion in March.
Broader momentum in the Chinese economy was solid in the first quarter, with GDP growth hitting five per cent year-on-year, the top of the government’s full-year target range, and lessening the need for immediate stimulus.
But even China, long criticised by trading partners for subsidy-backed, cut-price manufacturing, is not insulated from the hit to buyers’ purchasing power as fuel and transport costs rise.
The factory data published in April showed input prices remained elevated, particularly for refined goods and petroleum, coal and chemicals.
Unemployment rates also edged higher and retail sales – a gauge of consumption – continued to underperform industrial output.
Trump is scheduled to meet Chinese President Xi Jinping during his May 14-15 visit to Beijing, as both countries seek to stabilise a relationship strained by tensions over trade, Taiwan and the Iran war.