China's industrial production is forecasted to improve to 5.0% year-on-year in August, up from 4.5% in July, primarily supported by robust export growth in AI-related electronics, according to DBS Group Research. Export growth in China edged up from 23.9% year-on-year in July to 25.0% in August, reflecting strong external demand. However, domestic retail sales are expected to remain subdued at 0.4% in August, partly due to a high base from last year's trade-in subsidy programs. Fixed asset investment is projected to decline further, expanding from -6.7% year-on-year year-to-date in July to -7.0% in August, as the property sector continues to drag on activity. The shift from presales to completed-home sales is likely to weigh on near-term investment, land acquisitions, and project starts, especially among highly leveraged private developers [1].
In Taiwan, Commerzbank economists report a record trade surplus of USD22.3bn in August, surpassing the Bloomberg consensus of USD19.9bn and up from USD17.2bn in July. Year-to-date, the surplus has risen 57.6% to USD136.9bn, driven by strong AI-related export growth. Taiwan's exports jumped 41.0% year-on-year in August, compared to 32.9% in July, with advanced semiconductors and other AI-related products leading the surge. Electronic-component exports soared 58.0%, and information, communication, and audiovisual products rose 41.8%, together accounting for 78.7% of total exports in the first eight months. Imports also rose more than expected, up 44.3% year-on-year, with machinery and electrical equipment imports surging 60.1%. Crude oil imports increased 55.8% amid renewed tensions in the Middle East. Authorities expect export momentum to remain strong in the second half, though the economy's reliance on AI-driven electronics leaves it exposed to any slowdown in global AI investment [2].
Meanwhile, DBS Group Research expects India's inflation to accelerate to 4.9% year-on-year, up from 4.4% the previous month, driven by rising food and energy costs. Inflation is projected to stay above 5% in the second half of the fiscal year, indicating a tighter policy bias. Energy prices have remained volatile, raising input cost pressures, while retail fuel prices have been unchanged since May. Cumulative southwest rainfall is currently 15% below the long-term average as of early September, with slower reservoir build-up potentially impacting upcoming rabi crops. India's goods trade deficit is likely to remain wide at around $30 billion, as improvements in exports are offset by a further widening in the energy import bill [3].
CONCLUSION
Strong AI-related export growth is driving record trade surpluses and industrial output improvements in Taiwan and China, offsetting domestic weaknesses such as subdued retail sales and property sector challenges. In contrast, India faces rising inflation pressures and a persistent trade deficit due to volatile energy prices and below-average rainfall. The market takeaway is positive for AI-driven exporters, but caution remains for economies exposed to inflation and sectoral weaknesses.