China's Exports Rise Amid AI-Driven Demand

Exports grew 36.3% in September, the largest jump since the COVID-19 pandemic.

China's exports rose by more than a third in September, boosting the world's second-largest economy as it grapples with slowing growth.

Exports rose 36.3 percent year-on-year to $447.18 billion last month, accelerating from 25 percent growth in August, government data released Wednesday showed.

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Ending the list, the jump marks the biggest monthly increase in exports since 2021, when China's trade figures were skewed by the effects of the Covid-19 pandemic and strict lockdowns.

Technology-related business led growth, with semiconductor exports up more than 108 percent and automatic data processing machine shipments up 55 percent.

According to the statistics of the General Administration of Customs, imports have increased by 31% compared to the same period of the previous year, which has increased by 28.2% compared to August.

"High-tech demand, supported by the global and domestic AI cycle, remained the main driver, while China's pricing and supply chain competition in other major export categories also helped maintain momentum," Taylor Wang, economist at HSBC in Hong Kong, said in a note to clients.

China's total exports in the first 9 months of the year increased by 21.3% and reached 3.37 trillion dollars. Imports increased by 27.5% and reached 2.43 trillion dollars.

The gap between exports and imports in the first three quarters left China with a trade surplus of $938.1 billion.

The Association of Southeast Asian Nations (ASEAN) was China's largest export market, with exports rising more than 52 percent to $81.7 billion in September.

Exports to the European Union rose 25.3 percent to $60.15 billion in September, while exports to the United States rose 39.6 percent to $47.88 billion.

After decades of relying on state investment and exports to prop up its economy, China is struggling to find new ways to grow amid a shrinking population, deflated property market inflation and weak domestic consumption, which contributes far less to gross domestic product (GDP) than advanced economies.

According to the International Monetary Fund's latest growth outlook, China's economy is expected to grow by 4.5 percent in 2026, which would be the slowest growth since 1990, excluding years off the Covid pandemic.

"Strong export growth should keep China's growth on track to meet its 4.5-5% growth target for 2026," Lin Song, chief Greater China economist at ING, told Al Jazeera.

"Nonetheless, growth remains quite unbalanced and domestic data is very soft in comparison," Song said.

Rebalancing growth in the medium term will be important if China is to achieve its long-term growth goals.