China exports seen rising 15% in May on front-loaded orders

China’s export machine looked set to post another strong month in May, but much of the gain appeared to come from foreign buyers rushing to get ahead of higher costs rather than from a broad-based pickup in world demand. A poll of 32 economists put May exports up 15% from a year earlier in dollar terms, faster than April’s 14.1%, with semiconductors and AI-related components doing much of the heavy lifting.

The latest strength built on a pattern already visible in April, when companies hurried to stockpile components amid fears that war-related energy and input costs would rise further. That front-loading helped keep Chinese shipments elevated even as the wider global economy remained uneven. In May, factory data suggested the rush had already started to cool: new export orders fell sharply month on month after reaching a two-year high in April, when warehouse managers described business as “booming” as firms scrambled to lock in supplies.

The signal from China’s domestic economy was hardly reassuring. The official manufacturing purchasing managers’ index for May came in at 50.0, down 0.3 percentage points from April and right on the line between expansion and contraction. That left Beijing still reliant on external demand to keep growth on track, even after first-quarter GDP rose 5.0% year on year and matched the top end of the government’s target range. Imports were expected to have climbed 25% in May, a sign that Chinese producers were still drawing in a large volume of inputs even as they shipped more finished goods abroad.

The forecast itself pointed to wide uncertainty. Economists in the poll saw May export growth anywhere from about 10% to 19.5%, a spread that reflects how difficult it is to separate durable demand from temporary stocking ahead of higher costs. The risk for Beijing is that the current lift may prove to be a burst rather than a new baseline, especially if inventories are rebuilt and foreign buyers pause to see whether energy markets stabilize.

That fragility matters because China’s export model is drawing sharper criticism abroad. The Organisation for Economic Co-operation and Development said industrial subsidies reached $108 billion in 2024 across the sectors it tracks, the highest level since the global financial crisis. OECD Secretary-General Mathias Cormann said Chinese firms received, on average, three to eight times more government support than OECD-based firms between 2005 and 2024, and that subsidies explained nearly 60% of Chinese firms’ market-share gains over that period.

The regional spillovers are already visible in South Korea, where semiconductor demand tied to China’s AI and memory-chip needs has supported exports. If China’s front-loaded trade surge fades, Beijing will face renewed pressure to rely less on factories and more on household spending, a shift that remains politically urgent and economically unfinished.