China’s export slowdown deepens

China’s export growth slowed to 2.5% in March, the weakest pace in six months, as imports jumped far faster and squeezed the trade surplus. (cnbc.com) China’s General Administration of Customs said March exports totaled $321.0 billion and imports reached $269.9 billion, leaving a monthly surplus of $51.1 billion. Imports rose 27.8% from a year earlier, the fastest increase since November 2021. (english.customs.gov.cn; cnbc.com) The slowdown was a sharp break from the combined January-February data, when exports had surged 21.8% and imports rose 19.8%. China publishes the first two months together each year because the Lunar New Year holiday shifts on the calendar. (cnbc.com) The March figures landed as the International Monetary Fund cut its 2026 growth forecast for China to 4.4% and said the country still leans too heavily on foreign demand. The fund’s April 14 World Economic Outlook briefing said weak domestic demand has left growth more exposed to swings in trade. (imf.org; thestar.com.my) That dependence has grown more visible over the past year. CNBC reported that net exports accounted for about one-third of China’s economy last year, even as the property slump and soft consumer spending kept pressure on domestic growth. (cnbc.com) Officials and economists tied March’s weaker export number to the war in the Middle East, which has pushed up oil and shipping costs and darkened the demand outlook. International Monetary Fund chief economist Pierre-Olivier Gourinchas said on April 14 that the closing of the Strait of Hormuz and damage to energy facilities had raised the risk of a broader energy crisis. (imf.org; cnbc.com) China’s customs vice minister Wang Jun said global oil prices had shown “fierce fluctuation” and created a “complex and severe” trade environment. Zhiwei Zhang of Pinpoint Asset Management said the conflict likely hit demand as much as supply, weighing on export orders. (cnbc.com) The import surge also showed that China is paying more for what it buys from abroad. Customs data showed ordinary-trade imports rose 16.8% in March, while processing-trade imports climbed 43.4%, a sign that higher commodity and input costs are moving through the system. (english.customs.gov.cn) Beijing’s next test is whether domestic demand can take over as trade cools. If exports stay near March’s pace and import costs remain elevated, the gap between China’s official growth target and the International Monetary Fund’s 4.4% forecast will get harder to close. (imf.org; thestar.com.my)