Goldman Sachs: China's May Trade Growth Accelerates; Surplus Rises to USD 105.4 Billion

Overview

This report analyzes China's latest trade data for May 2026. The core conclusion is that trade growth accelerated broadly in May, exceeding market expectations, with export growth reaching 19.4% YoY, import growth hitting 27.5% YoY, and the trade surplus widening to USD 105.4 billion. The report attributes the export recovery mainly to increased shipments to the U.S. and a low base effect from the same period last year, while high import growth was driven more by rising prices of bulk commodities such as chips and energy rather than increases in physical volumes.

Core views

In terms of aggregate performance, China's USD-denominated exports grew 19.4% YoY in May (vs. 14.1% in April), significantly above Goldman Sachs' forecast of 15.0% and market consensus; imports grew 27.5% YoY (vs. 25.3% in April), also exceeding expectations. On a seasonally adjusted basis, exports grew 3.0% MoM in May, while imports edged up 0.1% MoM. The trade surplus expanded sharply from USD 84.8 billion in April to USD 105.4 billion, reflecting resilient external demand combined with import price factors. Regionally, exports to the U.S. were the primary driver, growing 35.4% YoY in May (vs. 11.3% in April) with sequential improvement as well, partly reflecting a low base effect from last year; imports from the U.S. also grew 20.4% YoY. In contrast, export growth to the EU slowed to 7.6%, while imports from the EU turned negative at -1.3% YoY. Emerging markets showed mixed performance: exports to ASEAN grew 24.3% YoY, and exports to Africa and other emerging markets (e.g., South Korea, Russia) remained strong, but imports from major emerging markets declined sequentially. By product mix, tech-related exports led gains, with semiconductor export value surging 110.9% YoY, yet export volume grew only a modest 2.1%, indicating growth was almost entirely price-driven. Among metals, aluminum export value rose 38.5%, and rare earth ores and minerals soared 237.4%, both primarily driven by price effects. Exports of housing-related goods such as home appliances also saw a pickup in growth. On the import side, semiconductor import value rose 68.0% despite a 1% decline in volume; crude oil import value rose 15.3% while volume plunged 29.0%; natural gas import value turned positive with 11.0% growth while volume remained flat. Additionally, aircraft import value skyrocketed 443% YoY, which the report speculates may be related to preliminary procurement agreements following the Sino-U.S. leaders' meeting in May.

Analysis framework

The report employs a standard macro trade data analysis framework, first assessing overall sentiment by comparing YoY growth rates against market expectations, and utilizing seasonally adjusted MoM data to strip out calendar effects and observe marginal changes. Second, the report applies a 'volume-price decomposition' method, crucial for interpreting bulk commodity and tech trade data: when the growth rate of import or export values significantly exceeds volume growth, it indicates that changes are primarily driven by price factors (e.g., global chip price hikes, oil price volatility) rather than shifts in real demand, which is vital for gauging actual economic activity. Finally, the report incorporates geopolitical events (such as the Sino-U.S. meeting) and policy context to explain abnormal fluctuations in specific categories (e.g., aircraft), validating pure data within a broader macro narrative.

Methodology notes

• Industry/Sector Analysis FrameworkVolume-price decomposition

  Decomposing trade value growth into 'volume contribution' and 'price contribution'

  When analyzing import/export data, looking solely at value growth can be misleading. For instance, if semiconductor export value doubles but volume remains virtually unchanged, it indicates price hikes rather than a demand explosion. This decomposition helps investors distinguish between 'real demand' and 'inflation/price disturbances,' enabling a more accurate assessment of real economic activity.

• Macroeconomic framework

  Seasonal Adjustment and MoM Analysis

  Raw YoY data is susceptible to distortion from base effects and holiday mismatches. The report uses seasonally adjusted MoM data (non-annualized) to observe true marginal momentum between months. This is standard practice for macro analysts identifying short-term economic turning points, offering a better reflection of current trends than YoY figures.

Key data

• May Export Growth YoY (USD Terms)+19.4%Higher than +14.1% in April, beating market expectations of 15.0%
• May Import Growth YoY (USD Terms)+27.5%Higher than +25.3% in April, beating market expectations of 26.0%
• May Trade SurplusUSD 105.4 BillionExpanded significantly from USD 84.8 billion in April, beating market expectations of USD 92.3 billion
• Export Growth to U.S. YoY+35.4%Accelerated sharply from +11.3% in April, partly supported by a low base
• Semiconductor Export Value Growth YoY+110.9%Export volume grew only 2.1%, indicating growth was primarily price-driven
• Crude Oil Import Volume Growth YoY-29.0%Despite a 15.3% rise in import value, physical volume declined significantly

Impact & implications

The report suggests that the better-than-expected trade data in May provides positive support for China's short-term economic growth, with the broad-based export recovery demonstrating resilient external demand. However, import growth is heavily reliant on price factors (e.g., rising chip and energy prices) rather than volume increases, implying that domestic real production and consumption demand may not be as robust as nominal data suggests. Furthermore, while the temporary rebound in trade with the U.S. is encouraging, its sustainability requires monitoring subsequent policy interactions and the underlying trend once base effects fade. The further widening of the trade surplus also helps alleviate external pressure on the RMB exchange rate.

What to watch

• Detailed breakdown of country-specific and product-level trade data to be released on June 20
• Sustainability of export growth to the U.S. after low base effects fade
• Subsequent impact of global semiconductor and energy price volatility on China's nominal trade values