China exports rise 25% before expected Trump-Xi summit

China's exports rose 25% year-on-year in August and imports increased 28.2%, customs data showed, as demand linked to artificial intelligence supported trade before an expected meeting between President Xi Jinping and US President Donald Trump.

The General Administration of Customs said export growth accelerated from 23.9% in July. Import growth also rose from July's 27.5%. The August figures were below forecasts in a Bloomberg survey of economists, which had projected 25.9% export growth and 31.0% import growth.

China's trade has remained a key support for its economy while domestic activity has been weak. Data published last week showed factory activity contracted in August for a second consecutive month.

Overseas demand for semiconductors, computing hardware and other products linked to the global AI boom has helped trade growth, alongside exports of electric vehicles, consumer goods and industrial equipment. From January through August, exports of computers and related parts rose 49.4%, customs data showed.

Nguyen Hoang Nam, a China economist at Capital Economics, wrote that China's trade growth remained robust in August, but said import momentum weakened in seasonally adjusted terms, reflecting “still-subdued domestic demand”.

Alicia Garcia-Herrero, Asia-Pacific chief economist at Natixis, told AFP that the improvement in imports looked more consistent with stronger corporate spending on computing capacity, electronics and manufacturing investment than with a broad recovery in household consumption.

China's cumulative trade surplus through the end of August reached $805.5 billion, customs data showed, putting it on course to surpass last year's record.

Shipments to the United States rose 34.4% year-on-year in August, compared with a 17% increase in July. Nguyen wrote that the share of shipments going directly to the United States stabilised at around 10%, while the share going to ASEAN remained elevated.

The figures come before an expected Trump-Xi summit in Washington this month. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote that trade imbalances had become a political issue with several key trading partners and said the US government had made clear at the G20 meeting that it was concerned.

Nguyen also wrote that China's bilateral surpluses with the European Union and the United Kingdom remained “exceptionally large” in August, raising the prospect of further protectionist measures in the region.