China’s exports grew much faster than expected in June, rising 27% year-on-year, driven by booming demand for artificial intelligence (AI)-related products and semiconductors, according to customs data released on Tuesday. The sharp increase exceeded economists’ expectations and marked a significant jump from the 19.4% growth recorded in May.Imports also rose strongly, climbing 36% in June, up from 27.4% in May, with analysts attributing part of the increase to higher import costs during the Iran conflict. As a result, China posted a trade surplus of $125.6 billion in June, widening from $105.4 billion in May.Analysts said soaring semiconductor prices and strong global demand for AI-related products played a major role in boosting exports.“Trade values took another big leg up in June,” Julian Evans-Pritchard, head of China Economics at Capital Economics said, AP reported. “This predominantly reflects the recent surge in semiconductor prices on the back of the AI boom. But even putting that aside, foreign demand for Chinese goods remains robust.”China has seen strong growth in exports of electric vehicles (EVs), automobiles and technology products as the rapid adoption of AI increases global demand for chips and electronic equipment.The robust export performance has helped cushion the economy against weak domestic consumption and a prolonged downturn in the property sector.During the first half of 2026, China’s exports increased 17.6%, while imports rose 26.6% compared with the same period last year. Exports to Southeast Asia surged nearly 35% in June, while shipments to the European Union and Latin America rose by more than 18% and 28%, respectively.Exports to the United States also increased by nearly 14% from a year earlier. Analysts said some of the growth reflects a rebound from last year’s weaker shipments after higher tariffs imposed by the Trump administration.The strong export performance comes even as policymakers in the US and Europe continue to express concerns over widening trade deficits with China. To avoid higher tariffs, many Chinese manufacturers have shifted production to other regions, while exports to emerging markets such as Southeast Asia, Africa and Latin America have continued to expand.Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China), said export growth is likely to continue but faces increasing risks. He said strong shipments of automobiles and AI-related products would remain dependent on global demand and evolving regulatory barriers.China is scheduled to release its April-June GDP data on Wednesday. The government has set an annual growth target of 4.5% to 5% for 2026, slightly lower than the 5% growth recorded last year.Last week, the International Monetary Fund (IMF) raised China’s 2026 growth forecast by 0.2 percentage points to 4.6%, but expects growth to slow to 4.1% in 2027.