On April 13, 2026, a cargo ship loaded with foreign trade containers sails toward the open sea in Jiaozhou Bay, Qingdao City, Shandong Province, China.
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China’s export growth fell to its lowest level in six months in March, while imports posted the strongest growth in more than four years as Middle East conflict hit the global demand outlook.
China customs data on Wednesday showed exports rose 2.5% in U.S. dollar terms from a year earlier, lower than the 8.6% increase expected by the median analyst survey polled by Reuters and slowing from a combined 21.8% increase in the first two months of this year.
Imports rose 27.8% year-on-year in March, marking the strongest growth since November 2021, significantly exceeding the expected 11.2% increase and accelerating from the previous two months’ total of 19.8%.
China released combined trade statistics for January and February due to fluctuations around the Lunar New Year, the country’s biggest holiday that follows the agricultural calendar.
The world’s second-largest economy continues to rely on trade for growth despite rising tensions with the United States and rising tariffs. Net exports accounted for about a third of China’s economy last year.
energy shock buffer
Although the Chinese government’s strategic oil reserves, diversified energy mix, and strict price controls have softened the blow from soaring oil prices, the export-dependent economy remains vulnerable to a global economic downturn due to the prolonged closure of the Strait of Hormuz.
China’s Vice Minister of Customs Wang Jun said in a press conference on Tuesday that global oil prices have experienced “wild fluctuations”, creating a “complex and tough” trade environment.
“Uncertainty in the global macro outlook due to the Middle East conflict is likely to have weighed on the demand side,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, putting a strain on exports.
That said, Zhang noted that because of the scale and efficiency of China’s manufacturing industry, China’s export momentum will be less affected by rising energy costs and raw material shortages than other export-dependent countries.
Eurasia Group’s China director Dan Wang said China’s strategic and commercial oil inventories, together with barrels in transit, represent well over 120 days’ worth of net imports. China can absorb shocks to a large extent by diversifying its energy sources, rather than just relying on coal, he added.
China’s crude oil imports fell year-on-year in March, down nearly 2.8% in volume terms and about 4.4% in US dollar terms, according to CNBC’s official trade data calculations. According to data compiled by Wind, natural gas imports decreased by 10.6% from the previous year to 8.18 million tons, the lowest level since October 2022.
Decrease in trade surplus
China’s trade surplus this year totaled $264.3 billion as of the end of March, shrinking 3% from a year earlier after hitting a record high in the first two months as imports ballooned due to tight global supplies.
“China cannot fully pass on the rise in energy prices to foreign consumers,” Zhang said, noting that China’s trade surplus is shrinking.
Since trade tensions escalated last April, China’s exports to the United States have doubled every month, but in March they fell 26.5% year-on-year, while imports rose 1%.
Customs spokesman Liu Daliang said at a press conference on Tuesday that trade between China and the Middle East declined in March after two months of increases, and called for “joint efforts by all parties to stabilize the conflict and de-escalate tensions.”
Meanwhile, the country’s rare earth imports more than tripled last month, while soybean imports rose just 20%.
But soaring commodity and energy prices stemming from the conflict are beginning to affect input costs for Chinese manufacturing, threatening to squeeze already thin company profit margins. The country’s ex-factory prices rose 0.5% in March, the first increase in more than three years.
With domestic demand still under pressure, the rate of increase in the consumer price index was 1% from a year earlier, slower than expected.
The country is scheduled to release its first quarter gross domestic product (GDP) on Thursday. Analysts polled by Reuters predict that growth will rise by 4.8%, compared with a three-year low of 4.5% in the fourth quarter of 2025.
