China's trade surplus in March dropped to a 13-month low of $51.1 billion, significantly below market expectations, according to ING’s Chief Economist for Greater China, Lynn Song [1]. This decline was driven by a combination of slowing exports and a surge in imports, particularly in technology-related categories [1]. For the first quarter of 2026, the trade surplus totaled $264.3 billion, representing a year-on-year decrease of 2.5% in USD terms and a steeper 4.8% decline in RMB terms, which is more relevant for GDP calculations [1].
The increase in imports was attributed in part to rising tech prices, and ING expects that higher energy prices will further boost import values in the coming months [1]. While this uptick in imports may alleviate concerns among China's trading partners, it is also expected to reduce the positive contribution of net exports to China's economic growth [1]. ING now sees its 4.7% GDP growth forecast for China in 1Q26 as vulnerable due to these trade dynamics [1].
Looking ahead, ING notes that if the drag from the US eases and no new tariff shocks occur, external demand should continue to play a significant role in supporting China's growth this year [1]. However, the potential for new tariffs cannot be fully ruled out, adding an element of uncertainty to the outlook [1].
CONCLUSION
China's March trade data signals rising risks to economic growth as the trade surplus narrows on stronger imports and weaker exports. ING warns that higher energy prices could further erode net export contributions, making its 4.7% GDP forecast for 1Q26 vulnerable. The outlook depends on external demand and the absence of new tariff shocks.