Follow our live coverage here.
BEIJING – China’s export growth slowed sharply in March from previous months, reflecting growing strains on the world’s No. 2 economy as the war in Iran upends global energy supply.
Exports rose just 2.5 per cent from a year earlier, compared with the median forecast of 8.6 per cent in a Bloomberg survey of economists and a gain of almost 40 per cent in February.
Imports surged almost 28 per cent, according to a statement released by the General Administration of Customs on April 14, leaving a surplus of US$51 billion (S$64.9 billion) – the smallest in more than a year.
The data caps off a wild month for global markets and economies, after the US and Israeli attack on Iran and Tehran’s retaliation spread upheaval throughout the Middle East and beyond.
Iran’s effective closure of the Strait of Hormuz pushed up the costs of materials from plastics to fibres by disrupting a major transit point for energy flows that accounts for about a fifth of the world’s oil and liquefied natural gas. Many consumer-facing Chinese factories saw profits squeezed.
Cushioning the hit from the oil crisis is a months-long boom in global AI investment. That drove a rally in memory chip prices and led to explosive export growth from Asian countries like South Korea and Taiwan.
In China, the value of integrated circuits exports surged nearly 70 per cent in the first two months of 2026, while electrical equipments soared more than 50 per cent.
Another tailwind for Chinese exports came when the US Supreme Court’s ruling in late February struck down President Donald Trump’s tariffs issued using his emergency powers. That led to a fall in the tariffs faced by China, which at one point reached as high as 145 per cent in 2025.
Those contradictory factors made predicting the precise extent of China’s trade expansion difficult. Economists’ forecasts for export growth in March ranged from a contraction of 10 per cent to a gain of 24 per cent. The standard deviation of the estimates – a measure of their dispersion – was the highest since April 2020, when the economy was reeling from the initial Covid outbreak.
China’s economy likely emerged from the storm with relatively little damage so far.
High-frequency data from the nation’s ports shows cargo throughput remained above its record-high levels in last year. Export orders in the official manufacturing purchasing managers’ index survey improved to the highest level since April 2024.
Economists had expected trade activities to moderate after a striking first two months of the year, when exports and imports both climbed about 20 per cent from 2025.
A later-than-usual Lunar New Year holiday in 2026 likely reduced the number of working days in March after adding to them in February compared with 2025.
The impact of the Iran war on China’s export outlook remains uncertain.
The conflict could result in higher global demand for Chinese green products such as solar panels, at least in the short term.
Already, overseas sales of Chinese electric and hybrid vehicles doubled in March to a new record. Chinese carmakers overtook Japanese peers in Australia for the first time, and doubled their market share in the UK.
But on the other hand, elevated oil prices are set to trigger monetary tightening in some economies while hurting consumer spending around the world, a negative for Chinese factories. BLOOMBERG
