China trade defies Iran war drag as exports, imports beat estimates in May

SHENZHEN, CHINA - MAY 1: The Chinese national flag is seen in front of stacked shipping containers bearing MSC (Mediterranean Shipping Company), Maersk, and Hamburg Süd branding at Yantian Port on May 1, 2026, in Shenzhen, Guangdong Province, China. Cheng Xin | Getty Images News | Getty Images China's trade growth held up better than expected in May, as surging AI-related exports helped buffer the economy against disruption from the Iran war. Exports rose 19.4% from a year earlier in U.S. dollar value terms, customs data showed Tuesday, accelerating from the 14.1% gain in April. Economists polled by Reuters had pegged growth at 15%. Imports growth momentum continued to build, expanding 27.4% in May, the outpacing from 25.3% in April, beating economists' forecast for a 25% growth. The import surge has largely been driven by higher input costs and narrowly concentrated in select categories, particularly semiconductor chips and gold, and "hardly a sign of rebalancing," according to economists at Bank of America Global Research. "With weak overall demand and ongoing domestic substitution, genuine trade rebalancing remains distant," BofA economists said, adding that the export boom has reduced Beijing's urgency for meaningful policy stimulus. China's economy has shown signs of faltering following a strong first-quarter. Growth slowed across the board in April, with industrial production and retail sales posting their weakest gains in years. …