UOB’s Ho Woei Chen highlights that China’s March data showed a sharp divergence between exports and imports, narrowing the trade surplus to a 13‑month low. The report stresses that seasonal factors and last year’s high base weighed on exports, while higher energy and raw material prices boosted imports. UOB notes resilient technology exports and expects further upside pressure on import prices as geopolitical risks persist.

Trade surplus narrows as imports jump

"China’s exports slumped while imports surged in Mar. In USD-terms, exports slowed to 2.5% y/y (Bloomberg est: 8.6%, Feb: 39.6%) and imports surged 27.8% y/y (Bloomberg est: 13.9%, Feb: 13.8%). Consequently, the trade surplus narrowed sharply to US$51.13 bn from US$90.98 bn in Feb, the lowest in 13 months."

"On the import side, the sharp acceleration in Mar was partly driven by higher global energy and raw material prices linked to the ongoing Middle East conflict. China’s imports of semiconductors and computers remained firm, alongside steady purchases of key commodities such as copper and iron. In volume terms, imports of coal and refined petroleum products increased compared with Mar last year, while crude oil and LPG imports declined, likely reflecting supply disruptions in the Middle East and a gradual shift toward alternative energy sources."

"With geopolitical risks persisting, import prices are expected to face further upside pressure in the coming months."

"Despite the softening of exports in Mar, overall trade performance in 1Q26 remained solid. Exports grew 14.7% y/y during the quarter, while imports rose even faster at 22.7% y/y. China recorded a cumulative trade surplus of US$264.33bn in 1Q26, slightly lower than US$271.09bn in 1Q25."

"Looking ahead, while it may still be premature to fully assess the impact of the Middle East conflict, a prolonged escalation is expected to weigh on global demand and pose risks to China’s export outlook."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)