China's Economic Expansion Continues Amid Soaring Worldwide Interest in Artificial Intelligence Solutions

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Chinese exports and imports soared in July, official data showed Friday, as the manufacturing powerhouse benefits from a global AI boom lifting overseas demand for its tech products.

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The world’s second-largest economy last year achieved a historic trade surplus of nearly $1.2 trillion, helping its manufacturing sector through a prolonged slump in domestic consumption.

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The export boom has been propelled further this year by increased demand for Chinese data-processing equipment and related components, as companies rush to build artificial intelligence capacity.

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Exports climbed 23.9 percent year-on-year last month, the General Administration of Customs (GAC) reported, compared with a 23.0 percent forecast by Bloomberg.

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Overseas shipments of computers and related parts jumped 45.2 percent on year in the first seven months, the data showed.

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“Export and import values remain elevated, helped by soaring global demand for electronics and green tech products,” wrote Julian Evans-Pritchard of Capital Economics.

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China’s trade surplus appears to be on pace to match that of last year, reaching $687 billion through the end of July, the data showed Friday.

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The yawning gap has increasingly raised eyebrows abroad — particularly in Europe, where leaders worry about floods of Chinese exports squeezing out local manufacturers.

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Beijing has insisted it never deliberately pursued a trade surplus.

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The Communist Party’s Politburo — the decision-making body headed by President Xi Jinping — urged a more “balanced” trade development at a key meeting late last month.

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– China-US flare-up –

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“Export growth continued to support the economy in July,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote in a note after Friday’s data.

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“I expect intense negotiations between China and (its) major trading partners in coming months on what can be done to make trade more balanced,” he added.

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Imports increased 27.5 percent in July, extending this year’s strong performance even as main indicators of domestic demand have remained weak.

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However, that was slower than the 36 percent surge seen in June, and also missed a Bloomberg forecast of 29.5 percent growth.

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The growth has been achieved despite considerable pressure on the global trading system from the war in the Middle East and simmering trade frictions between Beijing and Washington.

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China’s shipments to the United States rose 17 percent year-on-year last month, Friday’s data showed, as the countries remain locked in a trade war despite efforts to ease tensions.

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That brought China’s surplus with its superpower rival this year to nearly $171 billion through the end of July, according to the official data.

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The latest figures come days after a fresh flare-up in trade tensions between the world’s top two economies.

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Following sanctions imposed by Washington over forced labour and national security concerns, Beijing on Wednesday announced restrictions on drone exports to the United States and blacklisted six firms.

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China and the United States spent much of last year embroiled in an escalating trade war but reached a truce when US President Donald Trump met Xi in October.

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The relationship will undergo further scrutiny in coming weeks as officials prepare for a scheduled state visit by Xi to the United States in late September.

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AFP

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