China exports miss estimates in March, imports post best growth in more than four years

China’s export growth faced a slowdown in March as manufacturers grappled with soaring commodity and energy costs due to disruptions in the Middle East conflict. On the other hand, imports saw the strongest growth in over four years, indicating a shift in the country’s trade dynamics.

According to Chinese customs data released on Wednesday, exports grew by 2.5% in U.S. dollar terms last month, marking the slowest pace in six months. This figure fell short of analysts’ expectations of an 8.6% growth and was a significant drop from the 21.8% surge seen in the first two months of the year. In contrast, imports surged by 27.8% in March, the highest growth rate since November 2021, surpassing expectations and accelerating from the previous two months.

China typically combines trade data for January and February due to the Lunar New Year holiday, which can cause fluctuations in economic activity. Despite tensions with the U.S. and the imposition of higher tariffs, China remains heavily reliant on trade, with net exports accounting for a third of the country’s economy in 2025.

The recent surge in commodity and energy prices resulting from the conflict in the Middle East has begun to impact Chinese manufacturers’ input costs, potentially squeezing their profit margins. Factory-gate prices in the country rose by 0.5% in March, the first increase in over three years. However, the consumer price index only rose by 1% year-on-year, reflecting subdued domestic demand.

China’s economy is set to report its first-quarter gross domestic product on Thursday, with analysts forecasting a 4.8% increase compared to a 3-year low of 4.5% in the fourth quarter of 2025. This data will provide insights into the overall health of the economy amid ongoing global challenges.

In a press briefing, Wang Jun, China’s customs vice minister, highlighted the “complex and severe” trade environment caused by volatile global oil prices. While Beijing has implemented measures such as strategic oil stockpiles and price controls to mitigate the impact, the export-reliant economy remains vulnerable to external shocks.

Overall, the latest trade data from China underscores the challenges facing the country’s economy as it navigates through a period of heightened uncertainty and volatility in the global market. Stay tuned for more updates on China’s economic performance and trade dynamics.