Demand for AI chips drives record growth in Chinese exports

Key takeaways

• Chinese AI exports are soaring, driven by global demand for AI chips, reaching more than 359 billion dollars (306 billion euros) in April alone.
• Despite US export restrictions, China has become a leading supplier of AI-related goods.
• This AI-fuelled growth is benefiting not only China, but also neighbouring Asian economies through increased semiconductor sales.

The interconnectedness of the global economy is clearly visible now that both the United States and China are experiencing AI-driven growth. Although political tensions persist, leading to trade restrictions and sanctions, AI technology has delivered a significant boost to Chinese exports. In April alone, Chinese exports reached a record 359 billion dollars (306 billion euros), largely driven by sales of AI-related products such as semiconductors and computers. That surge translates into roughly 500 million dollars (425 million euros) in revenue per hour for Chinese companies.

Demand for AI chips drives export growth

Global demand for AI chips is skyrocketing, with US tech giants such as Alphabet and Meta Platforms planning major investments in data-centre equipment this year. China has capitalised on this trend and has become the world’s leading supplier of AI-related goods, despite being a net importer of certain critical technologies. Strikingly, the value of Chinese exports of integrated circuits has doubled, reaching more than 31 billion dollars (26 billion euros) in April.

Despite US export restrictions designed to limit China’s access to advanced technology, the country has made substantial progress in producing so-called “legacy” chips, which use older technology but remain essential components in a wide range of electronic devices. China’s self-sufficiency rate for AI chips has risen significantly and is expected to reach even higher levels by 2030.

Automotive sector boosts growth

This shift towards high-tech exports is benefiting not only China, but also neighbouring Asian economies such as South Korea and Taiwan. As demand for AI products continues to grow, these countries are seeing a strong increase in semiconductor sales. However, the global rise in oil and gas prices as a result of geopolitical tensions is putting pressure on the Chinese economy.

Despite these challenges, China’s automotive sector is booming, in particular manufacturers of electric vehicles. Vehicle exports have risen sharply, providing an additional boost to the country’s overall export performance.

Imports rising alongside exports

The AI boom has pushed both Chinese exports and imports to record levels. Foreign purchases of goods and services have also risen sharply, driven by demand for components such as semiconductors. Economists expect import growth this year to outpace export growth for the first time since 2021.

While the short-term outlook for Chinese exports remains positive, long-term success depends on overcoming technological hurdles, particularly in developing advanced chip manufacturing capabilities. A relaxation of US export restrictions would further strengthen commercial ties between the two countries and could shift the dynamic from full decoupling to a more selective containment strategy.

This article was originally published on Business AM and is here re-published under license. It can be seen in its original here.