China’s Export Momentum Weakens in March Amid Impact of Iran War

China’s export growth lost momentum in March, reflecting the widening impact of the ongoing Iran war 2026 on global trade and economic stability. Official data showed that Chinese exports rose modestly by around 2.5% year-on-year in March, a sharp slowdown compared to the strong 21.8% growth recorded in the first two months of the year. The figure fell short of market expectations, signalling growing pressure on the country’s export-driven economy.

Analysts attribute the decline largely to disruptions caused by the Middle East conflict, which has unsettled global energy markets and increased transportation costs. Rising fuel prices and supply chain uncertainties have weakened demand across key international markets, affecting shipments of Chinese goods. The slowdown has also offset earlier gains driven by strong global demand for artificial intelligence-related products and technology exports.

Meanwhile, China’s imports surged by nearly 28% during the same period, indicating relatively resilient domestic consumption. However, the sharp rise in imports significantly narrowed the country’s trade surplus, raising concerns about the balance of external trade. The ongoing tensions in the Middle East, particularly around critical shipping routes, have further intensified cost pressures for exporters. Higher freight charges and volatile oil prices have reduced purchasing power in major economies, contributing to softer demand for Chinese exports.

Despite the weaker performance in March, economists note that certain sectors—such as semiconductors, electric vehicles, and green technology—continue to show potential for growth. Seasonal factors, including earlier strong export activity and holiday-related fluctuations, also played a role in the recent dip. Looking ahead, experts caution that persistent geopolitical tensions and unstable energy markets could continue to weigh on China’s export outlook, posing challenges to sustained economic recovery in 2026.