China’s Exports Jump on AI and Tech Demand, Masking Weak Domestic Spending

China’s export growth picked up pace in August, driven by strong overseas orders for high tech and AI linked goods, giving the economy a much needed lift as consumer spending at home stays soft. Exports rose 25% year on year, up from 23.9% in July, while imports jumped 28.2%, customs data showed. Analysts point to robust demand for AI hardware, electric vehicles, solar panels and batteries as the main drivers, alongside firms rushing shipments to the US ahead of possible tariff changes.

Trade Surplus Nears Record Territory

The country’s trade surplus widened to $119.09 billion in August, pushing the year to date figure past $805 billion and putting 2026 on pace to top $1 trillion for a second straight year. The surplus with the US alone climbed to $29.18 billion.

Domestic Economy Still Lagging

Industrial output, retail sales and investment all slowed heading into the third quarter, with the property sector still struggling. Economists say the export strength reduces pressure on Beijing for immediate rate cuts, even as leaders acknowledge weak domestic demand remains a concern.