July 13, 2026, (Inside AI) — China's export engine is showing signs of a measured cooldown, yet the relentless global appetite for artificial intelligence technology is keeping its trade momentum firmly in positive territory. Economists polled by Reuters forecast that exports from the world's second-largest economy grew 18.2% year-on-year in dollar terms in June, a slight deceleration from May's 19.4% surge. The data, set for official release this week, underscores how AI-related demand is acting as a powerful stabilizer for China's $20 trillion economy.
Imports are also expected to have risen 24%, cooling from 27.4% in May. South Korea's export figures—often a leading indicator for Chinese imports—point to robust purchases of semiconductors and other tech components, rather than a broad-based recovery in domestic consumption. This narrow, tech-driven import strength highlights the uneven nature of China's economic rebound.
The AI boom is proving to be a critical buffer. Global investment in artificial intelligence is fueling demand for Chinese-made automated data processing equipment, which saw exports jump a staggering 60% in value terms in May. In contrast, traditional manufacturing sectors are struggling: furniture exports, for instance, grew just 1.9% over the same period. This divergence reveals a structural shift in China's export portfolio, increasingly skewed toward high-tech components essential for AI infrastructure.
Behind the headline numbers, Chinese firms are aggressively cutting prices to win over cost-conscious global consumers squeezed by higher energy costs linked to the Iran conflict. Factory-gate prices continued to fall in June, even as overseas demand showed signs of recovery. This price competition is a double-edged sword—it preserves market share but squeezes profit margins, leaving exporters vulnerable to external shocks.
Geopolitical maneuvering is also shaping trade flows. U.S. retailers brought forward orders by four to six weeks to stock up for Black Friday and Christmas sales, racing ahead of expected tariff hikes later this year. The urgency follows President Donald Trump's May visit to Beijing, which failed to yield the trade breakthroughs many had hoped for. The resulting uncertainty keeps a cloud over future export growth.
Economists are divided on the exact scale of June's performance. BNP Paribas and Mizuho Securities both forecast a 20% rise in exports, maintaining the robust pace seen in the first half of the year. However, Chinese analysts were more cautious: China Industrial Securities and Shanghai Securities projected growth of just 12%. This split reflects differing assessments of how sustainable the AI-driven boom really is.
China's trade surplus is forecast to come in at $120.60 billion in June, up from $105.43 billion a month prior. This swelling surplus may invite renewed scrutiny from trading partners, especially as the global economy navigates conflict-related disruptions and a prolonged property downturn at home. The government has set a growth target of between 4.5% and 5%, with second-quarter GDP figures due on Wednesday.
The reliance on AI exports masks deeper vulnerabilities. Sluggish domestic demand leaves China's economy increasingly exposed to any softening in external markets. While semiconductors and tech components thrive, most other export categories are barely growing. This imbalance bolsters the argument for further policy support to stimulate internal consumption and reduce dependence on a single, albeit booming, sector.
Reporting by Joe Cash; Polling by Pulkit Khanna and Susobhan Sarkar in Bengaluru and Jing Wang in Shanghai; Editing by Shri Navaratnam
