China’s exports surge in May, boosted by Asean, but US and EU tariff headwinds cloud outlook

China’s exports remain under increasing pressure from intensifying trade frictions and looming tariffs from the United States and European Union, analysts said, despite shipments having accelerated in May for a second consecutive month – partly due to a surge in demand from Southeast Asia.

Junyu Tan, a regional economist for North Asia with credit insurance company Coface, said China’s exports in May expanded due to a lower base from the previous year, while shipments of cars, ships and electronics “remained solid”.

“This month’s export data shows strong performance, continuing the robust export trend seen over the past four months, and China’s economy is primarily driven by exports,” said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

“The rapid growth in exports to Asean is mainly benefiting from the shift in the industrial chain, with most of these products ultimately destined for the United States.”

Within May’s export data, the value of car shipments rose in May by 16.63 per cent, year on year, with the volume also growing by 29.9 per cent, while the value of ship exports surged by 57.1 per cent.

Exports of integrated circuits also rose by 28.47 per cent by value last month compared with a year earlier, while the value of shipments of hi-tech products rose by 8.1 per cent.

“Exports have become a rare cyclical driver, stabilising China’s economic growth in 2024 supported by strong global demand in electronics and green tech. Such a rebound will remain apparent in the coming months, bringing export growth to 6 per cent or above,” Ng added.

“However, there is also growing concern about overcapacity and geopolitics, which may bring further headwinds in 2025 and beyond.”

“However, China’s products remain