The offshore yuan held steady around 6.78 per dollar on Tuesday, after stronger-than-expected trade data underscored the resilience of China's export sector despite mounting signs of an economic slowdown. Exports surged 19.4% year-on-year in May to a record USD 376.8 billion, supported by inventory building to offset rising shipping and energy costs tied to the Gulf conflict, as well as solid demand for semiconductors and AI-related products. Although the conflict in the Middle East has not yet had a major impact on exports, subdued domestic demand continues to leave the economy exposed to any deterioration in global conditions, bolstering expectations of further policy easing. At the same time, imports rose 27.4% to USD 271.4 billion, surpassing forecasts for a 25% increase and indicating that domestic demand remained relatively firm despite rising inflationary pressures. As a result, China’s trade surplus widened to USD 105.4 billion, its highest level since January.