HONG KONG – Newly released trade data from China’s General Administration of Customs reveals a marked deceleration in the country’s export growth for March 2026, a shift that economists largely attribute to growing geopolitical instability stemming from the ongoing Iran conflict and its cascading effects on global energy prices and cross-border demand.
Last month, Chinese exports expanded by just 2.5% year-on-year, a sharp slowdown from the 21.8% aggregate growth recorded across January and February, and a figure that fell short of consensus forecasts from financial analysts. In a striking contrast, import growth jumped to 27.8% year-on-year in March, up from the 19.8% growth seen in the first two months of the year.
The strong export performance that China recorded in early 2026 was largely fueled by technology-related shipments, with semiconductor exports surging in particular amid the global boom in artificial intelligence development. But economists warn that the protracted Iran conflict could dampen overall global appetite for Chinese goods through the rest of the year.
“China’s exports have decelerated as the Iran war starts to affect global demand and supply chains,” explained Gary Ng, senior economist for Asia Pacific at Natixis, the French investment bank.
Economists at Bank of America, led by chief economist Helen Qiao, echoed that assessment in a recent research note. They noted that even after the robust rebound in export growth through the first two months of 2026, the energy price shock triggered by the Iran conflict is likely to pull overall demand downward. If the conflict extends longer than current market projections, the Bank of America team added, the greatest risk will come from a sustained broad-based slowdown in global demand.
Long-standing trade frictions have also added pressure on Chinese export performance in recent months. U.S. President Donald Trump’s elevated tariffs on Chinese goods have continued to weigh on China’s shipments to the United States, pushing Chinese exporters to reorient their trade flows toward other markets. Over the past quarter, the country has ramped up exports to Europe, Southeast Asia, and Latin America to offset lost U.S. sales.
Beyond trade flows, geopolitical observers are closely tracking upcoming diplomatic engagement between the two largest global economies. Trump’s planned visit to Beijing for a meeting with Chinese President Xi Jinping, originally scheduled for earlier this spring, was delayed due to the outbreak of the Iran war, and a new timeline for the high-stakes summit is still pending.
Looking at China’s broader economic outlook for 2026, Beijing has set an annual growth target of 4.5% to 5% — the lowest official target the country has announced since 1991. China hit its 2025 target of “around 5% growth” last year, powered in large part by strong export performance that delivered a record $1.2 trillion annual trade surplus. Analysts broadly agree that exports will remain a critical engine for maintaining China’s economic expansion this year, as a years-long slump in the country’s property sector continues to drag on domestic consumption and private investment.