China's export growth driven by AI demand as US tensions and tariffs persist

China’s July export figures defy expectations with a 23% rise, bolstered by global AI demand amid US-China trade tensions and a slowing domestic economy, highlighting shifting dynamics in international trade and technology sectors.

China’s export engine kept running in July, with official customs data showing overseas shipments rising about 23% from a year earlier in dollar terms, ahead of forecasts and still strong even as the pace eased from June. Reuters reported that the figures pointed to continued support from global demand linked to artificial intelligence, helping offset weak household spending at home and a softer outlook for the wider economy.

Imports also rose more than expected, though at a slower rate than in June, while the trade surplus remained large at roughly $112 billion. That leaves Beijing’s external balance once again under scrutiny from trading partners that have long pressed China to rely more on domestic consumption and less on exports as a growth driver.

The July numbers also reflected some front-loading by manufacturers rushing goods to the US before a higher tariff took effect late in the month. That came against a backdrop of renewed friction between Washington and Beijing, including China’s move this week to restrict drone exports in response to US technology curbs and forced-labour blacklists. The exchange has added fresh uncertainty just as the two sides were discussing a possible summit.

The trade data landed after China said second-quarter growth slowed to 4.3%, the weakest pace since late 2022, and after policymakers in July pledged more fiscal support and flexible monetary steps without unveiling major new consumer stimulus. Beyond the broader export picture, Tom’s Hardware reported that China’s integrated circuit exports surged in the first half of 2026, underscoring how the global chip and AI boom continues to support parts of the country’s industrial base even as the political backdrop darkens.