May Exports Surpass Expectations, Driven by AI and Green Tech

Overview

This report provides a detailed analysis of China's import and export trade data for May 2026. The key finding is that, driven by the global manufacturing recovery, the AI investment boom, and the green transition spurred by energy shocks, China's export growth has accelerated further and significantly exceeded market expectations. Meanwhile, imports have also maintained strong growth, driven by rising prices of commodities and electronic products. The report argues that despite external headwinds such as geopolitical tensions and energy shocks, China's leading position in the supply chains for AI components and green technologies remains solid, serving as a critical pillar of current export resilience.

Core views

The export side shows comprehensive acceleration with notable structural highlights. In May, exports rose 19.4% year-on-year, outperforming April's 14.1% growth rate and significantly exceeding both Bloomberg consensus (15%) and Barclays' own forecast (14%). This robust performance was primarily driven by two key engines: First, the ongoing global AI capital expenditure cycle continues to boost China's exports of AI-related products as a major supplier; in May, high-tech product exports accounted for 29.8% of total exports, up 51% year-on-year, with semiconductor exports experiencing an explosive 111% increase. Second, the Middle East energy shock has actually intensified global demand for renewable energy, and heightened geopolitical tensions have accelerated the green transition, allowing electric vehicles, lithium batteries, wind turbines, and solar cells to maintain their double-digit growth momentum since the beginning of the year. Looking at trading partners, export destinations showed clear differentiation but remained generally positive. Exports to the U.S. surged 35.4% year-on-year, with a 6.2% month-on-month increase, better than average levels, indicating that China-U.S. trade flows are gradually normalizing after the post-tariff era, significantly boosting overall export growth. Regional trade was also active, with exports to ASEAN and Japan/South Korea/Taiwan showing substantial increases compared to April. By contrast, exports to the EU and the UK slowed down somewhat, though exports to Africa continued to expand at double-digit rates. The strong growth in imports was largely driven by price factors. In May, imports rose 27.4% year-on-year, slightly above market expectations, mainly reflecting soaring prices of energy and semiconductors. Although machinery and commodity imports grew steadily, in terms of physical volume, crude oil and coal imports continued to decline, with natural gas imports stabilizing and rebounding due to anticipated summer electricity demand. On the agricultural front, despite the China-U.S. agreement to expand agricultural trade, soybean imports fell in both volume and price in May; however, absolute import volumes remained at historically high levels, reflecting ample Brazilian supply and improved customs clearance efficiency. Auto imports continued to weaken, with year-on-year declines widening further.

Analysis framework

The report adopts a typical macroeconomic trade data analysis framework. First, it establishes a 'beyond-expectations' benchmark by comparing actual figures with market consensus (Bloomberg consensus and institutional forecasts). Then, the analytical logic unfolds along three main lines: 'total volume—structure—country.' At the aggregate level, it uses the global manufacturing PMI to validate the broader external demand environment; at the structural level, it breaks down exports into high-tech/AI, green energy, and traditional manufacturing sectors to identify core sources of growth; at the country level, it distinguishes between developed and emerging markets to observe marginal changes in trade flows. For import data, analysts specifically conducted a 'value vs. volume' breakdown to remove the interference of price fluctuations and precisely determine whether import growth was driven by genuine demand or merely price effects—a method that helps more accurately gauge the health of the domestic real economy.

Methodology notes

• Macroeconomic frameworkValue-Volume Decomposition

  Analysis of divergence between import value and physical volume

  In analyzing imports, the report did not just look at the total value growth but separately broke down the physical import volumes of commodities like crude oil, coal, and iron ore. This is because commodity prices fluctuate dramatically, and value growth might reflect price hikes rather than a recovery in demand. By decomposing value and volume, analysts found that May's high import growth was mainly price-driven, while actual demand was relatively weak or differentiated, thus avoiding misjudgments about the strength of domestic demand.

• Industry/Supply Chain Analysis FrameworkUpstream-Midstream-Downstream Supply Chain Transmission

  Transmission of Global AI Capital Expenditure to China's Intermediate Goods Exports

  The report analyzes China's AI-related exports within the context of the global AI investment cycle, pointing out that as a key supplier of AI manufacturing components, China directly benefits from global AI infrastructure investments. This analytical perspective emphasizes how external industry trends transmit through supply chains to drive export orders in specific domestic industries.

Key data

• May Export Growth Rate (Year-on-Year, in USD)19.4%Accelerated from April's 14.1%, significantly above the market consensus of 15%
• May Import Growth Rate (Year-on-Year, in USD)27.4%Accelerated from April's 25.3%, slightly above the market consensus of 26%
• High-Tech Product Export Growth Rate51%Accounted for 29.8% of total exports, with semiconductor exports growing 111%
• May Export Growth Rate to the U.S. (Year-on-Year)35.4%Increased 6.2% month-on-month, contributing 3.2 percentage points to overall export growth
• Global Manufacturing PMI52.6Remained at a four-year high, indicating sustained upward momentum in global manufacturing activity

Impact & implications

The report concludes that May trade data demonstrates China's export sector's remarkable adaptability and competitiveness amid today's complex global environment. The dual impetus from AI and green tech not only offsets potential negative impacts from energy shocks but also reinforces China's central role in the global high-end manufacturing supply chain. Signs of normalization in China-U.S. trade flows provide positive signals for future export stability. However, the 'price-driven but volume-weakened' feature of imports suggests that domestic demand recovery remains uneven, and weaker exports to Europe and softening exports to Latin America reflect uncertainties in regional demand. Overall, the strong export performance provides solid support for second-quarter economic growth, but attention should be paid to the real momentum of imports once price factors subside.

Risks

• The duration of the Middle East energy shock and its potential negative spillover effects on external demand
• Escalating geopolitical tensions could disrupt the green transition process and trade flows
• The slowdown in export growth to the EU and the UK may persist
• Import growth is largely price-driven; if commodity prices fall, nominal import growth could quickly decelerate

What to watch

• The sustainability of LNG procurement momentum under peak summer electricity demand
• The implementation status of the China-U.S. agricultural trade agreement (especially the fulfillment of 2026-2028 procurement commitments)
• Whether the global AI capital expenditure cycle will reach an inflection point
• Whether the month-on-month improvement trend in exports to the U.S. can continue