China's exports grew by 2.5% in March compared to a year ago, marking a significant slowdown from the 21.8% export growth recorded in January and February, according to data released by China’s customs agency on Tuesday [1]. This figure fell short of analysts’ estimates and reflects rising uncertainties stemming from the ongoing Iran war, which has impacted energy prices and global demand [1]. Imports, on the other hand, surged 27.8% in March, up from a 19.8% year-on-year increase in the first two months of the year [1].
Technology-related exports, particularly semiconductors, have contributed to robust export performance earlier in 2026, driven by the global artificial intelligence boom [1]. However, economists warn that the prolonged Iran war could dampen overall global demand for Chinese exports this year [1]. Gary Ng, a senior economist for Asia Pacific at Natixis, stated, “China’s exports have decelerated as the Iran war starts to affect global demand and supply chains” [1]. Bank of America economists, led by Helen Qiao, noted that the risks will "arise from a persistent global slowdown in overall demand if the conflict lasts longer than currently expected” [1].
Additional pressures on China’s exports include elevated tariffs imposed by U.S. President Donald Trump and ongoing tensions between Washington and Beijing, which have strained shipments to the U.S. in recent months [1]. In response, China has increased exports to other regions such as Europe, Southeast Asia, and Latin America [1]. Analysts are monitoring Trump’s planned visit to Beijing in May to meet with Chinese leader Xi Jinping, which was delayed due to the Iran war [1].
Chinese leaders have set an annual economic growth target for 2026 of 4.5% to 5%, the lowest since 1991 [1]. China met its “around 5%” economic growth target for 2025, supported by strong exports and a record high $1.2 trillion trade surplus [1]. Analysts believe exports will remain a key driver for economic expansion this year, especially as the domestic property sector continues to slump, weighing on domestic demand and investments [1].
CONCLUSION
China's export growth slowed sharply in March, reflecting the impact of the Iran war on global demand and supply chains. While technology exports and diversification to other regions have provided some support, ongoing geopolitical tensions and a weak domestic property sector present continued risks. Exports are expected to remain crucial for China's economic growth in 2026.