China’s trade growth accelerated sharply in June, with exports rising 27.0% year-on-year in US dollar terms, up from 19.4% in May and well above expectations of 18.2%. Imports also strengthened markedly, climbing 36.0% from 27.4% previously and beating forecasts of 24.0%. The stronger-than-expected performance lifted the trade surplus to USD 125.6B from USD 105.4B, underscoring resilient external demand despite an increasingly uncertain global environment.
The improvement was broad-based across major trading partners. Exports to the US rose around 14%, suggesting bilateral trade has remained resilient despite tariff headwinds. Shipments to Southeast Asia surged about 35%, reinforcing the region’s importance as China’s largest export destination, while exports to the European Union increased 18.5%. Technology was a standout driver, with exports of integrated circuits more than doubling from a year earlier to USD 38B, highlighting continued strength in global demand for semiconductors and AI-related supply chains.
One notable exception was energy. Crude oil imports fell -41% from a year earlier to 29.3 million tonnes, likely reflecting lower purchasing following the temporary easing in Middle East tensions during much of the survey period, as well as inventory management after earlier buying.
Economic Data
| Indicator | Actual | Expected | Previous |
|---|---|---|---|
| Exports (YoY) | 27.0% | 18.2% | 19.4% |
| Imports (YoY) | 36.0% | 24.0% | 27.4% |
| Trade Balance (USD) | 125.6B | USD 119.5B | 105.4B |
Market Takeaways
- Both exports and imports significantly exceeded expectations, pointing to stronger-than-expected trade momentum.
- Export growth accelerated to its fastest pace since October 2021, supported by broad-based demand across major trading partners.
- Technology remained a key driver, with integrated circuit exports more than doubling to USD 38B, highlighting continued AI and semiconductor demand.
- Trade with the US, ASEAN and the EU all strengthened, suggesting resilient external demand despite geopolitical and trade uncertainties.
- Crude oil imports fell sharply by 41%, contrasting with broader import strength and reflecting lower energy purchases during much of June.
- The strong trade report provides a positive contribution to China’s near-term growth outlook, although renewed Middle East tensions and higher oil prices could alter the trade dynamics in coming months.
