AI Boom Fuels China's Exports to Record Highs, Boosting Economy Amid Growth Concerns

A striking aerial view captures electric vehicles destined for export alongside numerous containers at the bustling port of Shanghai, China, on April 13, 2025, as reported by China Daily via Reuters. In a significant development for the world's second-largest economy, China's exports experienced a substantial surge of over one-third in September, providing a much-needed boost amidst concerns of slowing growth. Government figures released on Wednesday revealed that exports climbed by 36.3 percent year-on-year last month, reaching $447.18 billion. This marks an acceleration from the 25 percent increase observed in August and represents the most significant monthly export rise since 2021, a period when COVID-19 pandemic effects and stringent lockdowns had previously skewed trade figures.

The surge was predominantly driven by tech-related trade. Semiconductor exports saw an impressive leap of more than 108 percent, while shipments of automatic data processing machines increased by nearly 55 percent. Imports also showed robust growth, rising 31 percent year-on-year, an uptick from the 28.2 percent gain in August, according to data from the General Administration of Customs.

Taylor Wang, an economist at HSBC in Hong Kong, noted in a client advisory, "High-tech demand, supported by the global and domestic AI upcycle, remained the key driver, while China’s pricing and supply-chain competitiveness in other major export categories also helped sustain the momentum."

For the first nine months of the year, China's total exports reached $3.37 trillion, a 21.3 percent increase, while imports grew by 27.5 percent to $2.43 trillion. This resulted in a substantial trade surplus of $938.1 billion for the first three quarters.

The Association of Southeast Asian Nations (ASEAN) stood out as China's largest export market, with September exports to the region soaring by over 52 percent to $81.7 billion. Exports to the European Union also saw a healthy rise of 25.3 percent to $60.15 billion, and shipments to the United States jumped by 39.6 percent to $47.88 billion.

As China endeavors to find new growth avenues beyond its traditional reliance on state-led investment and exports—a strategy that has powered its economy for decades—it faces challenges including a declining population, a deflating property market, and weak domestic consumption, which contributes less to its Gross Domestic Product (GDP) compared to advanced economies. The International Monetary Fund's latest outlook projects China's economy to grow by 4.5 percent in 2026, which would be its slowest expansion since 1990, excluding the anomalous pandemic years.

Lynn Song, chief economist for Greater China at ING, commented to Al Jazeera, "The strong export growth should keep China’s growth on track to achieve its growth target of 4.5-5 percent for 2026." However, she added, "Nonetheless, growth remains quite unbalanced, with domestic data quite soft in comparison. It will be important to rebalance growth over the medium term if China is to achieve its longterm growth targets."