China's exports once again topped expectations with official data on Tuesday indicating that the continued global AI boom helped boost demand for chips and computing equipment from the world's second-largest economy in June.
The figures came despite global trade disruptions caused by the U.S.-Israeli war on Iran, providing a much-needed boost to China, which is increasingly reliant on exports to fuel growth.
Overseas shipments rose 27.0% year-over-year, beating the 19.0% forecast in a Bloomberg survey of economists.
The General Administration of Customs data also showed imports soared 36.0%, easily outstripping the 26.1% estimated in the Bloomberg survey, and well up from the 27.4% jump seen in May.
"Trade values took another big leg up in June. This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom," Julian Evans-Pritchard, of Capital Economics, said in a note.
The value of China's semiconductor exports more than doubled from the same month a year ago and rose $2.7 billion from May, while data processing equipment shipments also rose 53.1% from a year earlier.
But that expansion was "entirely a price story caused by the ongoing shortage of memory chips," Evans-Pritchard said, noting that the volume of semiconductor exports actually fell year-over-year in June.
"Surging semiconductor prices are playing a key role in pushing up import values," rather than domestic consumption surging, he said.
Automobile exports, meanwhile, jumped 69.6% year-over-year, reflecting strong demand for Chinese electric vehicles, he added.
Shipments to the U.S. rose 13.9% to $43.5 billion, putting China's trade surplus with its superpower rival at $28.9 billion.
Ties between Washington and Beijing have stabilized since U.S. President Donald Trump visited Beijing in May, but the persistent trade imbalance remains a source of friction between the two.
China is also locked in a simmering trade feud with the European Union, with which it recorded a trade surplus of $32.9 billion in June, a rise from $30.7 billion in May.
June's data "showcases the competitiveness and resilience of China's manufacturing sector," Zhang Zhiwei, of Pinpoint Asset Management, wrote in a note.
"It also puts further pressure on the trade tension between China and its trading partners, Europe in particular," he said.
The volume of rare earths exports was down 34% last month and 6.4% on an annual basis in the first six months of the year as Beijing tightened restrictions on the critical elements.
China accounts for around two-thirds of the total global production of the minerals, which are used to make everything from smartphones to missiles, and has wielded its dominance in the sector as a weapon in trade wars with the West.
China's overall trade surplus hit $126 billion last month, up from $105 billion in May, a gap that is worrying for European economies and other governments.
