---
title: "The Secret Behind Record-High Exports in May"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/289252149.md"
description: "China's exports rose 19.4% year-on-year in May, hitting a record high, driven primarily by \"rising prices and stable volumes.\" Against the backdrop of high oil prices, the export model is shifting from \"trading volume for price\" to \"compensating volume with price,\" with varying volume-price performances in the AI supply chain, rare earths, and other sectors. Institutions maintain their bullish outlook on exports, supported by passive substitution orders driven by energy cost advantages and potential benefits from reciprocal tariff reductions between China and the US"
datetime: "2026-06-10T00:46:10.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/289252149.md)
  - [en](https://longbridge.com/en/news/289252149.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/289252149.md)
---

# The Secret Behind Record-High Exports in May

**Core Views**

Exports rose 19.4% year-on-year in May, with the monthly export scale hitting a historic high.

**The core driver behind exports significantly exceeding expectations is "rising prices and stable volumes." Against the backdrop of high oil prices driving a repricing of global inflation expectations, China's exports are gradually shifting from "trading volume for price" to "compensating volume with price."**

(1) The AI supply chain saw rising prices and stable volumes;

(2) Rare earths, mobile phones, refined oil products, and fertilizers saw rising prices but declining volumes;

(3) Aluminum materials saw rises in both volume and price;

(4) Labor-intensive products such as footwear and luggage saw narrowing declines in both volume and price;

(5) Automobiles traded price for volume.

**We maintain our judgment that exports will remain strong, supported by two factors:**

First, leveraging its energy cost advantages, China is accepting more "passive substitution" transfer orders. The trend of "rising prices and stable volumes" in export products is expected to spread further, potentially leading to simultaneous improvements in export enterprises' profit margins and export values.

Second, if China and the US achieve reciprocal tariff reductions in the future, non-sensitive goods such as hats, shoes, and home furnishings will benefit.

**Main Text**

Data released by the General Administration of Customs shows that China's exports (denominated in USD) rose 19.4% year-on-year in May, compared to a previous increase of 14.1%; imports rose 27.4%, compared to a previous increase of 25.3%; and the trade surplus amounted to $105.43 billion, compared to $84.82 billion previously. In RMB terms, exports rose 13.8% year-on-year in May, compared to a previous increase of 9.8%; imports rose 21.5%, compared to a previous increase of 20.6%; and the trade surplus amounted to RMB 723.98 billion, compared to RMB 585.69 billion previously.

**I. May Export Performance Was Particularly Impressive.**

**Exports rose 19.4% year-on-year in May, an increase of 5.3 percentage points from the previous value. The absolute scale hit a new monthly high, with month-on-month growth outperforming the historical average for the same period, significantly exceeding market expectations.**

In terms of absolute scale, May exports reached $376.78 billion, setting a new historical high for monthly export volume.

In terms of month-on-month growth, May exports increased by 4.9 percentage points month-on-month, outperforming the historical average for the same period (the average for 2014-2025, excluding 2022, was 4.0%).

**The previously announced May Manufacturing PMI New Export Orders Index weakened significantly, raising concerns that exports might slow down. However, the strong performance of May exports confirms our previous judgment: a decline in new export orders does not equal weakening exports.**

In our report "No Need to Worry About the Economy: Decline in New Export Orders ≠ Weakening Exports," we pointed out that although the new export orders index dropped sharply from 50.3% to 48.6% in May, a decrease of 1.7 percentage points far exceeding the historical average for the same period, this does not mean exports are "stalling." Instead, it may indicate that exports are undergoing intense structural optimization and momentum conversion. We maintain our judgment that exports will remain strong throughout the year.

**II. The Core Reason for May Exports Significantly Exceeding Expectations Is Rising Prices and Stable Volumes of Export Products.**

**May export data significantly exceeded expectations, with the core driver being "rising prices and stable volumes." Facing the continuous impact of high oil prices, the global competitive advantage of Chinese production has become even more prominent, showing the resilient characteristic of "compensating volume with price" in exports.**

In our previously published report "Can China's Exports Withstand the Pressure of High Oil Prices?", we pointed out that although high oil prices and high inflation suppress global aggregate demand, the stickiness of export prices will support year-on-year growth in China's exports. That is, China's exports offset potential pressure on the volume side through positive contributions from the price side.

**Overall, starting from April, China's export prices rose significantly, while export volumes maintained resilience.**

The total export volume and price indices released by the General Administration of Customs on May 29 showed that the total export price index increased by 5% year-on-year in April, up 6.2 percentage points from the previous value. The total export volume index increased by 4.6% year-on-year, up 3.9 percentage points from the previous value.

**Looking at specific categories, there is a clear divergence in volume and price performance across different supply chains:**

**First, the AI supply chain saw rising prices and stable volumes.** In May, integrated circuit exports increased by 110.9% year-on-year, with price increases being the primary reason. The export price of integrated circuits rose by 106.5% year-on-year, while the export volume grew by only 2.1%.

**Second, rare earths, mobile phones, refined oil products, and fertilizers saw rising prices but declining volumes.** Except for rare earths, which were affected by export controls, the growth in export value for other products was mainly driven by a significant increase in costs. In May, rare earth exports increased by 237.4% year-on-year, with export prices rising by 260.4% year-on-year, while export volume decreased by 6.4% year-on-year. In May, refined oil product exports increased by 27.2% year-on-year, with export prices rising by 66.6% year-on-year, while export volume decreased by 23.6% year-on-year. In May, mobile phone exports increased by 44.3% year-on-year, with export prices rising by 49.5% year-on-year, while export volume decreased by 3.5%.

**Third, aluminum material exports saw rises in both volume and price.** In May, exports of unwrought aluminum and aluminum materials increased by 38.5% year-on-year, with export prices rising by 20.5% year-on-year and export volume increasing by 15.0% year-on-year.

**Fourth, labor-intensive products such as footwear and luggage saw narrowing declines in both volume and price.** Although still in negative growth, there are signals of marginal improvement. In May, luggage exports decreased by 4.9% year-on-year, an improvement of 6.4 percentage points from the previous value, with year-on-year readings for export price and volume improving by 2.8 and 4.0 percentage points, respectively, from the previous values. In May, footwear exports decreased by 10.4% year-on-year, an improvement of 6.8 percentage points from the previous value, with export prices decreasing by 2.5% year-on-year, an improvement of 14.6 percentage points from the previous value.

**Fifth, automobiles traded price for volume.** In May, automobile exports increased by 39.3% year-on-year, with a significant increase in export volume being the main reason. Export volume increased by 43.1% year-on-year, while export prices slipped slightly by 2.7 percentage points year-on-year.

**III. Exports Are Expected to Remain Strong; Watch for Signals of Rising Export Prices and Reciprocal Tariff Reductions Between China and the US**

**Against the backdrop of high oil prices driving a repricing of global inflation expectations, China's exports are gradually shifting from "trading volume for price" to "compensating volume with price," and export enterprises' profit margins and export values may see simultaneous improvements.**

Recent export volume and price data have initially verified this trend. First, under the impact of high oil prices, exports of products such as refined oil and fertilizers showed characteristics of "rising prices and declining volumes," but export values still achieved rapid growth driven by price increases. Second, benefiting from strong energy supply resilience and relatively low energy costs, aluminum material exports performed outstandingly, showing a pattern of rising volume and price. Third, although exports of some labor-intensive products remain under pressure, the declines in volume and price have narrowed, and signals of marginal improvement are emerging.

**Currently, the conflict between the US and Iran remains at an impasse, and energy cost advantages are expected to drive further concentration of global orders in China.** Manufacturing economies in the EU, Japan, South Korea, and parts of ASEAN generally face pressure from rising energy costs. In contrast, Chinese manufacturing, leveraging the cost advantages brought by "coal-power integration," demonstrates greater stability and competitiveness in the global supply system and is accepting more "passive substitution" transfer orders. As a result, China's share in global exports is expected to rise passively, and positive signals of strong exports continue to spread.

**Furthermore, if phased progress is made in subsequent China-US economic and trade consultations, it is expected to provide a marginal boost to China's exports, particularly benefiting non-sensitive goods sectors such as labor-intensive products.**

Judging from the progress of this round of economic and trade consultations, the China-US economic and trade teams have reached certain consensus on some bilateral tariff arrangements. In the future, regardless of the name under which the US imposes or replaces tariffs on China, the overall tariff level on China is expected to be difficult to significantly exceed the level corresponding to the joint arrangement of the Kuala Lumpur economic and trade consultations. At the same time, if subsequent consultations continue to advance, there is a possibility that some unilateral tariffs on China may be further canceled, creating more favorable conditions for the repair of bilateral economic and trade cooperation. Both sides agreed in principle to discuss reciprocal tariff reduction arrangements for products of equivalent scale under the framework of the Trade Council, with the scale potentially reaching $30 billion each or even higher. For relevant products of mutual concern, Most Favored Nation tax rates may apply in the future, and the possibility of even lower tax rate arrangements cannot be ruled out.

**We believe that the priority direction for US tariff reductions on China is relatively clear. The core logic is likely to prioritize covering non-sensitive goods sectors, including traditional categories such as hats, shoes, clothing, daily consumer electronics, home furnishings, furniture, and light industrial manufacturing, while trying to avoid high-end manufacturing sectors with strong strategic competitive attributes.**

Reviewing the period of China-US tariff friction from 2018 to 2019, the US imposition of tariffs on China showed obvious structural and differentiated characteristics: for mid-to-high-end manufacturing categories where China and the US had direct competitive relationships, such as communication equipment, mechanical equipment, and transportation equipment, the US imposed significantly stronger taxes, with tariff coverage close to 100% and generally applying a higher rate of 25%. The core intention was to curb China's industrial upgrading and protect local advantageous industries. In contrast, for livelihood necessities where China had traditional comparative advantages and the US itself was highly dependent, the US imposed relatively limited taxes at that time. This structural difference also retains considerable policy space for current and future expectations of tariff reductions in non-sensitive goods sectors.

Risk Warning and Disclaimer

The market carries risks; investment requires caution. This article does not constitute personal investment advice, nor does it take into account the specific investment objectives, financial status, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investment based on this content is at the user's own risk.

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