World AI-related trade has grown quickly and is becoming a structural driver of cross-border goods flows. According to the World Trade Organisation (WTO), China is now the largest exporter of AI-related goods.
China’s AI-related exports cover much of the value chain, from raw materials to hardware manufacturing, AI technology development and application deployment. The article describes China’s strength in AI trade as uneven across different parts of the chain.
China’s position is linked to low-cost energy, scalable computing infrastructure and strong manufacturing capacity. These factors are expected to keep supporting China’s comparative advantages in AI-related trade.
The article also states that China still depends on imports of high-end chips. It adds that geopolitical risks could affect the future development of AI-related trade.
The article was created with the help of an Artificial Intelligence tool and reviewed by an editor.
Global trade related to artificial intelligence has become a structural driver of the market, and we see this as a key factor for the coming weeks. China is now the largest exporter of AI-related goods, covering everything from raw materials to hardware and applications. This suggests continued strength in Chinese technology indices, making call options on ETFs like the Hang Seng TECH Index an interesting play.
This underlying strength is supported by recent data, with China’s customs agency reporting a 9% year-over-year increase in exports of computing hardware for the first quarter of 2026. This data reinforces the country’s comparative advantages in low-cost energy and scalable manufacturing. We should therefore consider selling out-of-the-money puts on major Chinese manufacturers in the AI supply chain to collect premium from this stable growth.
However, the strength in AI trade is asymmetric, with a persistent reliance on high-end chip imports creating a significant vulnerability. The U.S. Commerce Department’s expansion of the Entity List last month to include more Chinese supercomputing firms demonstrates how geopolitical risk can disrupt this trade. This creates opportunities for pair trades, such as going long on non-Chinese semiconductor firms like NVIDIA while buying puts on exposed Chinese tech names.
Looking back from our perspective in 2025, we saw how the 2024 restrictions on advanced chip-making equipment laid the groundwork for this dynamic. That trend solidified the divide, where China excels in mid-range hardware and AI applications but remains dependent on foreign technology for cutting-edge processing. This history shows that any news regarding semiconductor supply chains will have an outsized impact on the market.
This tension between export dominance and import reliance is likely to increase market volatility. With trade policy talks scheduled between U.S. and E.U. officials next month, implied volatility on ETFs like the KraneShares CSI China Internet ETF (KWEB) has already ticked up by 4% in the last week. This environment suggests that strategies like long straddles could be effective for traders anticipating a sharp price move but uncertain of the direction.
