China’s export growth experienced a sharp deceleration in March, rising only 2.5 percent year-on-year, according to official data released on Tuesday. This slowdown was more pronounced than anticipated, as economists surveyed by Bloomberg had forecast an 8.6 percent expansion. The figures follow a record trade surplus of $1.2 trillion in 2024, which was bolstered by a more than 20 percent increase in combined exports during January and February. However, the weaker performance in March highlights the mounting headwinds facing global trade, including a significant 26.5 percent drop in shipments to the United States, which totaled $29.4 billion. This decline is occurring amid renewed trade tensions, particularly after Washington imposed steep tariffs under President Donald Trump.
On the import side, China experienced a robust rebound, with inbound shipments soaring by 27.8 percent—well above the 14 percent forecast. Analysts attribute this surge largely to rising global energy prices, which have increased sharply due to the ongoing US-Iran conflict. While China’s diversified energy sources provide some insulation from these fluctuations, experts caution that a broader economic slowdown could dampen demand for its manufactured goods. Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, noted that growth to major export destinations has slowed across the board, with tensions in the Middle East weighing heavily on global demand. He expressed concern that China’s trade surplus is likely to shrink this year, suggesting that elevated energy costs may impact competitors more severely than China, given the scale and efficiency of its manufacturing sector.
This data release comes just ahead of Beijing’s highly anticipated first-quarter GDP report, scheduled for Thursday. The government is targeting an annual growth rate of 4.5 to 5.0 percent, the lowest in decades. Economists polled by AFP predict that the economy expanded by 4.8 percent in the first quarter, a slight increase from 4.5 percent in the final quarter of 2024. Amid these economic challenges, there are growing calls for Beijing to rebalance its economy, shifting away from a reliance on exports and infrastructure investment toward fostering stronger domestic consumption. This shift is particularly urgent as a prolonged crisis in the property sector continues to weigh on growth and consumer confidence.
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