HONG KONG (AP) — China’s exports accelerated in June, jumping 27% from a year earlier, driven by strong demand due to the boom in artificial intelligence, the customs agency said Tuesday.

The increase in exports in June was much better than economists had expected. Exports rose 19.4% year-on-year in May.

Imports in June surged 36%, stronger than May’s 27.4% year-on-year growth.

China’s exports of vehicles, especially EVs, and other tech-related products have boomed as rapid adoption of AI increases the need for semiconductors and other electronic equipment.

The strength in export manufacturing has helped to offset weakness in domestic spending and investment.

“While growth is likely to continue, it is increasingly fragile,” said Wei Li, Head of Multi-Asset Investments at BNP Paribas Securities (China). Robust shipments in autos and AI-related items will remain dependent on global demand and regulatory barriers, he said.

Policymakers including those in the U.S. and in Europe have warned of elevated trade deficits against China. In order to bypass trade barriers such as higher tariffs, China has been localizing production in regions like Europe, Li said. China has also been exporting more to Southeast Asia, Latin America and Africa.

China is set to announce its April-June quarter economic growth data on Wednesday. Chinese leaders in March set an annual economic growth target of 4.5% to 5%, slightly lower than the 5% growth in 2025.

Last week, the International Monetary Fund raised China’s annual growth forecast by 0.2 percentage point to 4.6%. But it said it expects China’s economy to expand just 4.1% in 2027.

Chinese leaders have sought to boost consumer spending through various initiatives, including trade-in subsidies for autos and home appliances. But many ordinary Chinese have been feeling the pressure from a slowing economy and avoiding big-ticket purchases.

Chan Ho-him, The Associated Press