China’s export sector is expected to deliver another strong performance in May, reinforcing its role as one of the country’s primary growth engines amid ongoing weakness in domestic demand.

According to a Reuters survey of economists, exports are forecast to have increased 15% year-over-year in dollar terms, improving slightly from April’s 14.1% growth rate.

The expansion has been supported by a combination of strong global demand for semiconductors and artificial intelligence-related technologies, as well as overseas buyers accelerating orders to protect against potential supply disruptions and rising energy costs linked to tensions in the Middle East.

AI and Semiconductor Demand Continue to Drive Trade

A major contributor to China’s export strength remains the rapid expansion of the global artificial intelligence industry.

Strong demand for semiconductors, advanced electronics, and technology components has continued to support China’s manufacturing sector and export activity.

Recent trade data from South Korea, often viewed as a leading indicator of Chinese industrial demand, showed exports surging more than 80%, driven largely by semiconductor shipments and technology-related components feeding into China’s production networks.

This trend highlights the continued importance of AI infrastructure investments and advanced manufacturing in supporting regional trade flows.

Signs of Slowing Momentum Emerging

Despite the strong headline forecasts, some economists believe export growth may be approaching a peak.

Recent factory activity surveys showed a noticeable decline in new export orders during May after reaching a two-year high in April.

Manufacturers previously reported exceptionally strong demand as foreign companies rushed to secure inventory before potential increases in transportation and energy costs.

As inventory stockpiling slows and buyers work through existing supplies, export growth could moderate in the coming months.

Forecasts among economists remain divided, with estimates ranging from approximately 10% growth to nearly 20%.

Imports Reflect Manufacturing Strength

China’s imports are also expected to remain robust.

Economists forecast imports will increase by approximately 25% year-over-year, roughly matching April’s growth rate of 25.3%.

The strong import performance reflects continued purchases of semiconductors, industrial components, and raw materials used in China’s manufacturing supply chains.

While exports receive most of the attention, import growth suggests industrial activity remains relatively healthy despite broader economic challenges.

Trade Surplus Continues to Expand

China’s trade surplus is expected to widen further.

Economists forecast a May surplus of approximately $92.1 billion, up from $84.8 billion in April and significantly above March’s $51.3 billion.

The growing surplus reflects China’s continued ability to generate strong export earnings while maintaining its position as a critical manufacturing hub within global supply chains.

However, the expanding surplus is also attracting increasing international scrutiny.

International Pressure Builds

China’s export-driven growth model continues to face criticism from policymakers and economists abroad.

Several international organizations have urged Beijing to focus more heavily on strengthening domestic consumption rather than relying predominantly on exports and industrial production.

Critics argue that extensive industrial support measures and subsidies have helped Chinese manufacturers gain global market share while increasing competitive pressures on producers in other countries.

Recent economic studies have suggested that China’s trade surplus relative to global economic output remains historically elevated and may continue reshaping international manufacturing dynamics for years to come.

Policy Challenges Remain

While exports have helped support overall economic growth, policymakers continue to face concerns about weak domestic demand and slowing momentum in other sectors of the economy.

Many economists believe additional policy support may eventually be required if external demand softens or geopolitical tensions begin to impact trade activity more significantly.

Recent diplomatic discussions between the United States and China helped ease some tensions, but substantial disagreements over trade policies and broader geopolitical issues remain unresolved.

Outlook

China’s export sector appears poised to deliver another strong month of growth, supported by AI-related demand, semiconductor shipments, and inventory stockpiling by overseas buyers.

However, as front-loaded orders begin to fade and global economic uncertainties persist, maintaining the current pace of export expansion may become increasingly challenging. The durability of external demand, combined with China’s ability to stimulate domestic consumption, will likely play a crucial role in shaping the country’s economic performance during the remainder of 2026.