China’s export growth slowed significantly in March, rising just 2.5% year-over-year, according to data released by the country’s customs agency. This marks a sharp decline from the robust 21.8% growth recorded in January and February, as the ongoing Iran conflict and global energy crisis begin to weigh on international demand and supply chains.
External Pressures Mount
The Iran war has disrupted global energy markets, driving fuel prices higher and threatening inflation worldwide. Economists warn that prolonged conflict could further weaken demand for Chinese exports, particularly as U.S. tariffs and geopolitical tensions already strain trade relations. China’s shipments to the U.S. fell 26.5% in March, while exports to the European Union and Southeast Asia saw modest gains.
China’s exports have decelerated as the Iran war starts to affect global demand and supply chains,
said Gary Ng, a senior economist for Asia Pacific at Natixis.
Domestic Resilience Amid Global Uncertainty
Despite external challenges, China’s diversified energy sources and vast oil reserves have helped mitigate the war’s impact. Analysts note that demand for Chinese renewable energy technologies, such as solar cells and wind turbines, remains strong, supported by global shifts toward green energy. Additionally, the artificial intelligence boom continues to drive semiconductor exports.
China has set a 2026 economic growth target of 4.5% to 5%, its lowest in decades, reflecting pressures from a prolonged domestic property slump and slowing global demand. However, economists expect exports to remain a key driver of economic expansion, even as external risks persist.