SunSirs: China's Foreign Trade Grows 15% in First Quarter: March Exports to the Middle East Turn Negative

According to Yicai, China’s foreign trade grew by 15% year-on-year in the first quarter of this year, marking a strong start, thanks to an overall recovery in external demand and the stability of China’s supply chains.

However, geopolitical risks have inevitably caused short-term disruptions to the export structure. Affected by the situation in the Middle East, China’s export growth to the Middle East turned negative in March, with regional trade facing significant pressure.

Facing a more complex and volatile external environment, China’s foreign trade continues to demonstrate resilience. According to customs statistics, in the first quarter of this year, China’s total import and export value of goods exceeded RMB11 trillion, up 15% year-on-year. This marks a record high for the same period in history, and the quarterly growth rate is the highest in the past five years. Specifically, exports grew by 11.9%, while imports grew by 19.6%.

On April 14, Wang Jun, Deputy Commissioner of the General Administration of Customs, stated at a press conference held by the State Council Information Office that by the first quarter of this year, China’s total import and export value had remained above RMB 10 trillion for 12 consecutive quarters, with the growth rate returning to double digits since the fourth quarter of 2022. In the first quarter, China’s imports and exports with developed economies such as the EU generally maintained growth, while growth rates with regions including ASEAN, Latin America, and Africa all exceeded 10%. This diversified market structure has ensured that China’s foreign trade remains solid and stable.

In RMB terms, China’s imports and exports with countries participating in the Belt and Road Initiative grew by 14.2%, accounting for 51.2% of the total import and export value; imports and exports with ASEAN and Latin America both grew by 15.4%, while those with Africa grew by 23.7%; trade with the EU and the UK increased by 14.6% and 13.1%, respectively; and trade with other APEC economies grew by 13.4%.

Notably, the growth rate of export value in the first quarter was significantly higher than that in the fourth quarter of last year. Although China’s exports to the United States continued to decline substantially under high tariffs, the trade diversion effect continued to take hold, and China’s exports to markets outside the United States maintained relatively rapid growth. The high growth in exports to the “Belt and Road” region in the first quarter was the primary driver of the acceleration in overall exports. After experiencing significant fluctuations in the external economic and trade environment last year, China’s export markets have continued to diversify, effectively enhancing resilience against shocks.

Market entities remain highly dynamic. Data shows that in the first quarter, 618,000 enterprises in China had import and export records, of which more than 540,000 were private enterprises, further consolidating their position as the mainstay of foreign trade. Foreign-invested enterprises saw exports and imports grow by 10.8% and 23%, respectively, in the first quarter; state-owned enterprises’ imports grew by 7.5%, accounting for 20.9% of total imports.

New drivers of exports are also gaining momentum, and imports have grown strongly, driven by domestic demand. Data shows that in the first quarter, China’s exports of mechanical and electrical products grew by 18.3%, accounting for 63.4% of total export value—an increase of 3.5 percentage points compared to the same period last year. Among these, exports of green products such as electric vehicles, lithium batteries, and wind turbine units and their components grew by 77.5%, 50.4%, and 45.2%, respectively. Meanwhile, imports of high-tech products grew by 25.1% in the first quarter.

The recovery in external demand has had a significant positive impact on China’s foreign trade.

Wang Jun noted that S&P Global data shows the global manufacturing PMI reached a 44-month high in February and had remained above the boom-bust line for eight consecutive months as of March. Specifically, from January to March, the ASEAN region remained above 51, while France and the UK stayed in the expansionary zone, and Germany returned to the expansionary zone in February. In the first quarter, China’s exports to ASEAN grew by 17.5%, while exports to the EU and the UK increased by 18% and 15.3%, respectively. Furthermore, the rapid development of global artificial intelligence and green low-carbon industries has driven significant growth in demand for smart products and green products.

Despite the rapid growth in foreign trade during the first quarter, the impact of international geopolitical conflicts on global industrial and supply chains cannot be overlooked.

“Statistical data shows that in March, China’s imports and exports to the Middle East shifted from year-on-year growth in the first two months to a decline.” Lü Daliang, spokesperson for the General Administration of Customs and Director-General of the Department of Statistics and Analysis, stated at the press conference that the Strait of Hormuz is a vital global corridor for goods and energy trade, handling 25% of global seaborne oil trade, 19% of liquefied natural gas (LNG) trade, 29% of liquefied petroleum gas (LPG) trade, and 13% of chemical trade, making it one of the world’s most critical maritime transport chokepoints. According to UNCTAD analysis, following the outbreak of hostilities in Iran, fuel prices have surged and remained at elevated levels, while oil transportation costs have risen sharply. These factors are driving up global production and transportation costs through supply chains, and the growth rate of global merchandise trade is expected to decline significantly.

Recently, the World Trade Organization (WTO) projected that the growth rate of global merchandise trade will slow by 2.7 percentage points to 1.9% in 2026. A report by the Organization for Economic Cooperation and Development (OECD) noted that the evolving conflicts in the Middle East pose a test to the resilience of the global economy.

The sudden shift in the Middle East situation in March had a certain impact on China’s exports to the region, but the overall effect on total exports was limited. Looking ahead, as the seasonal adjustment effect from the Lunar New Year fully subsides, export volatility is expected to ease in April, and growth rates will return to normal levels. In the short term, exports of major products such as new energy vehicles will continue to provide significant support for overall exports. It is worth noting that, under the influence of geopolitical conflicts in the Middle East, international crude oil prices have surged sharply since March. The global economy is currently facing a new situation characterized by significantly rising inflation and weakening economic growth momentum, which implies that weakening external demand may affect China’s exports in the coming period. Overall, it is projected that export growth in April will rebound to around 6.0%, with a trend of fluctuating downward pressure in the later period. However, as the base figure from the same period last year has dropped significantly, the decline in China’s exports to the United States is expected to narrow considerably starting in April.

Wang Jun stated that despite the complex and severe external environment, the underlying conditions and fundamental trends supporting the long-term positive development of China’s economy remain unchanged. In March, China’s Manufacturing PMI returned to expansionary territory, with indicators such as new export orders and imports showing a marked recovery. Results from the Customs Trade Sentiment Survey also indicate that the number of enterprises reporting increases in new export and import orders is on the rise.

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