China Economic Comment "Another positive surprise in export to yield..."

Research evidence excerpt

China Economic Comment "Another positive surprise in export to yield..."

al rebounds following weakness in previous months.

Non-Tech sectors provided the incremental push

Growth in the IT export basket moderated from an exceptional 76.0% y/y in May to a

still historically elevated 72.4% y/y. Exports of integrated circuits surged 122% y/y, a

pace rarely seen in recent history. Slower growth in mobile-phone and PC exports slightly

weighed on overall performance. Nevertheless, on a sequential basis, shipment volumes

of technology products continued to expand. Following a pause in 1Q26, automobile

export volumes increased sequentially in every month of 2Q26, with another jump in

June. This may reflect stronger demand for China's new-energy vehicles amid

heightened uncertainty surrounding global energy prices. Consumer-goods exports

grew by 4% y/y, marking an improvement after a prolonged period of contraction.

Exports of furniture and home appliances accelerated significantly, possibly reflecting

increased demand related to heatwaves experienced across several markets.

IT goods imports surged further, crude oil import volume dropped to recent low

Import growth accelerated further to 36.0% y/y in June, up from 27.4% y/y in the

previous month and well above the consensus expectation of 26.0%. Consequently,

China's monthly trade surplus widened to over USD 125 billion. IT-related imports

remained the primary driver of import growth. Imports of IT components accelerated to

68% y/y, led by strong growth in integrated circuit imports. Imports of automatic data-

processing equipment (ADPs) surged 157% y/y, an unprecedented pace which points to

a rapid increase in demand for AI data-center-related products. Growth in the value of

commodity imports moderated during the month.