(Bloomberg) — Economists have sharply upgraded their forecasts for China\u2019s import growth and now expect it to overtake the pace of expansion in exports for the first time since 2021, keeping the trade balance from ballooning much beyond last year\u2019s record.<\/p>\n
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As Chinese companies hoover up high-end chips needed for artificial intelligence, imports are set to jump to a five-year high of 5% in 2026, according to the median estimate of 17 economists polled by Bloomberg this month. That\u2019s more than double the gain predicted in March and would follow four years of stagnation and decline.<\/p>\n
With growth in exports also upwardly revised to 4.9%, from 3.6%, China is on track to run a goods surplus of just over $1.2 trillion, barely topping its level in 2025 after two straight years of rapid gains.<\/p>\n
Faced with pushback abroad as Chinese goods flooded into foreign markets since the pandemic, the government has responded by pledging to open the domestic market to imports and rolling out incremental policies such as removing tax incentives for exporters for products such as solar cells. But it\u2019s China\u2019s reliance on cutting-edge technologies linked to AI that\u2019s kicking imports into higher gear, as weak consumption restrains demand at home.<\/p>\n
\u201cThe government has realized the huge trade surpluses are not sustainable,\u201d said Serena Zhou, senior China economist at Mizuho Securities.<\/p>\n
While forecasting that imports will grow 7.5% this year, partly thanks to policy adjustments, she said foreign sales will remain a key growth engine for the economy. \u201cSo far I haven\u2019t seen a clear revival in domestic demand yet,\u201d said Zhou.<\/p>\n
Economists are abruptly shifting some forecasts for China after a quarter when trade boomed despite the worst energy disruption in generations triggered by the war in Iran.<\/p>\n
Imports soared 23% in the first three months of 2026 from a year ago and exports climbed 15%. Though industrial production and investment are taking off, stagnating consumption is leaving China with a lopsidedness that the International Monetary Fund says is contributing to global imbalances.<\/p>\n
The unexpected surge in imports in March was in large part a result of a global boom in AI investment that\u2019s propelling demand for chips and advanced manufacturing equipment.<\/p>\n
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Surging chip prices also played a role. The value of integrated circuits imported by China soared 54% last month from a year ago, accounting for almost a third of total growth, even as their volume only rose 14%, according to estimates from Pantheon Macroeconomics.<\/p>\n
The AI spending boom \u2014 forecast to reach $2.5 trillion this year \u2014 has become a significant driver of trade in Asia over the past year.<\/p>\n
While China has emerged as the world\u2019s largest supplier of AI-related goods last year, it\u2019s still a net importer of some critical technologies, especially advanced chips, according to research by economists at Standard Chartered Plc. Taiwan and South Korea, where China sources most of its AI-related imports, both reported surging exports to China in recent months.<\/p>\n
Apart from AI, other factors are also helping buoy imports.<\/p>\n
The yuan has strengthened close to 7% against the dollar over the past year, lifting the purchasing power of households and businesses. A rally in metal prices is also inflating the import value of products made of copper and aluminum.<\/p>\n
So far, higher global oil costs are yet to have a significant impact on growth in China\u2019s foreign purchases, as March data showed only a modest decline in its buying of crude.<\/p>\n
But a sharp reduction in traffic through the Strait of Hormuz, a vital waterway for energy, will likely create a drag on imports in the coming months. Pantheon Macroeconomics expects oil and gas import values to fall sequentially in April by 14% and 18%, respectively.<\/p>\n
The rosier outlook for exports reflects several inadvertent benefits from the war for China.<\/p>\n
A surge in demand for green energy products is helping Chinese companies including carmakers make further inroads abroad. And compared with other countries, China\u2019s supply chains are more able to withstand an energy shock.<\/p>\n
\u201cChina\u2019s economy has proven more resilient to Iran war-related supply shocks than many Asian countries,\u201d said Erica Tay, an economist at Maybank Securities. \u201cRising global demand for EVs and solar panels would even be a tailwind, as Chinese firms are dominant in these fields.\u201d<\/p>\n
In the first quarter, faster imports led to a 2.5% dip in China\u2019s goods trade surplus from a year ago. As a result, the contribution of net exports to economic growth halved, while investment\u2019s share surged to over a third.<\/p>\n
Authorities will likely hold off on further stimulus, as industrial growth holds up well. Economists polled by Bloomberg now expect the central bank to cut the policy interest rate in the third quarter, instead of the April-June period in last month\u2019s survey.<\/p>\n
A reduction to banks\u2019 required reserves is still expected before the end of June, though by a smaller magnitude of 25 basis points \u2014 half the cut predicted previously.<\/p>\n
(Updates second chart.)<\/p>\n
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\u00a92026 Bloomberg L.P.<\/p>\n","protected":false},"excerpt":{"rendered":"(Bloomberg) — Economists have sharply upgraded their forecasts for China\u2019s import growth and now expect it to overtake…\n","protected":false},"author":2,"featured_media":456923,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[4932,79,381,23585,5818,179,18,19,121059,17,77210],"class_list":["post-456922","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-bloomberg","tag-business","tag-china","tag-chinese-goods","tag-economists","tag-economy","tag-eire","tag-ie","tag-import-growth","tag-ireland","tag-trade-balance"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116479171405762212","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/456922","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=456922"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/456922\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/456923"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=456922"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=456922"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=456922"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}