China starts year with booming trade, despite US exports drop
The increase is a lifeline for the world’s second-largest economy as domestic consumer activity declines and contributes to last year’s record surplus.
Official figures for the first two months of the year (usually combined to account for distortions from the changing Lunar New Year holiday) showed a strong start to 2026 before war broke out in the Middle East.
The General Administration of Customs said exports increased by 21.8 percent on an annual basis, surpassing the 7.2 percent estimated in a Bloomberg survey of economists.
“Exports are likely to remain strong given the recent decline in US tariffs and strong demand for semiconductors,” said Zichun Huang of Capital Economics.
Many of China’s major trading partners have increasingly called on Beijing to reduce its growing trade surplus due to its impact on domestic competition.
Customs data showed that globally, China saw significant increases in exports of products including automobiles, clothing and household appliances over the two-month period. The readings came as Chinese leaders gathered last week for a closely watched annual political meeting where the government announced its lowest economic growth target in decades.
The challenges include a years-long decline in domestic spending that has not recovered since the end of the pandemic.
But in a sign of a pickup in activity, the latest figures showed imports rose 19.8 percent in January-February, beating the seven percent predicted in a Bloomberg survey.
Oil imports increased
The jump comes after official data showed on Monday that consumer prices rose at the fastest pace in three years last month.
However, as President Donald Trump continued his tariff campaign, exports to the United States fell by 11.0 percent.
Beijing and Washington were locked in a bitter trade war last year; This war saw mutual taxes reach triple digits at one point.
There are hopes that tensions may ease when Trump travels to China at the end of the month.
According to the figures, shipments to the USA totaled 67.24 billion dollars in the January-February period, while this figure was 75.56 billion dollars in the same period last year.
However, this was offset by exports to the European Union increasing by 27.8 percent, while exports to ASEAN increased by 29.2 percent.
However, Huang said in a note that “events in the Middle East will increase China’s oil import bill but suppress import volumes.”
Concerns about the global economy have intensified this month after the US-Israeli war against Iran sent oil prices to their highest since Russia’s invasion of Ukraine in 2022.
The conflict has led to the virtual closure of the critical Strait of Hormuz, through which one-fifth of global oil passes.
With tensions already rising last month, oil imports from China, the world’s largest commodity importer, increased by a total of 16 percent in the January-February period, according to customs data released on Tuesday.
Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, wrote that strong export growth will likely “strengthen” the argument of trading partners concerned about China’s growing trade imbalance.
China’s trade needs balancing, commerce minister Wang Wentao acknowledged Friday at a news event on the sidelines of the “Two Sessions” political meeting in Beijing.
“Exports and imports are like two wheels of a vehicle. If they are balanced, the vehicle runs smoothly and goes further,” Wang said.
Pinpoint’s Zhang added that strong exports and a lower official growth target “suggest that China is unlikely to launch stimulus anytime soon.”
