Merchandise trade surplus increases in May

Latest reading: In May, the trade balance was USD +105.4 billion, following a USD +84.8 billion figure in the prior month. Over the last 12 months, the trade balance summed to USD +1166.3 billion. Merchandise exports were up 19.4% in annual terms in May, following 14.1% growth in the prior month and beating market expectations. Exports grew by double digits to most major trading partners, bolstered by booming global demand for AI. Merchandise imports increased 27.5% in annual terms in May, coming on the back of 25.3% growth in the prior month.

Panelist insight: Digging into the AI theme, Nomura analysts said: “Robust semiconductor trade remained the dominant driver of highly elevated export and import growth in May, with the divergence between value and volume growth widening further, as chip price increases continued to overwhelm quantity growth. We estimate chips contributed 5.9pp to headline export growth. Together with automatic data processing (ADP) equipment, which is also closely linked to the current global AI boom and contributed an additional 3.4pp, AI-related exports accounted for 9.3pp. This marks two consecutive months in which AI-related exports have accounted for around half of China's total export growth, underscoring the outsized role of the global AI supercycle.”

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