UOB’s Ho Woi Chen highlighted that China’s March data showed a sharp gap between exports and imports, pushing the trade surplus to a 13-month low. The report emphasized 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 pressure on import prices as geopolitical risks persist.
Trade surplus has decreased due to increase in imports
“China’s exports declined in March, while imports increased. In US dollar terms, exports declined 2.5% y/y (Bloomberg estimated: 8.6%, February: 39.6%) and imports increased 27.8% y/y (Bloomberg estimated: 13.9%, February: 13.8%). As a result, the trade surplus narrowed sharply to US$51.13 billion in February. “US$90.98 billion, lowest in 13 months.”
“In terms of imports, the sharp rise in March was partly driven by higher global energy and raw material prices linked to the ongoing conflict in the Middle East. China’s imports of semiconductors and computers remained stable along with steady purchases of key commodities such as copper and iron. In volume terms, imports of coal and refined petroleum products increased compared to March last year, while imports of crude oil and LPG declined, possibly reflecting supply disruptions in the Middle East and a gradual shift towards alternative energy sources. Is.”
“As geopolitical risks persist, further pressure on import prices is expected in the coming months.”
“Despite the softness in exports in March, overall trade performance remained solid in 1Q26. Exports increased by 14.7% during the quarter, while imports expanded by a faster 22.7%. China recorded a cumulative trade surplus of US$264.33 billion in 1Q26, slightly lower than US$271.09 billion in 1Q25.”
“Looking ahead, although it may still be premature to fully assess the impact of the Middle East conflict, prolonged increases are 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.)
