China’s exports in March, measured in dollars, rose by 12.4% compared to the previous year. This was notably above the anticipated 4.4% and the prior increase of 2.3%.
Conversely, China’s dollar-denominated imports in March decreased by 4.3% compared to the same month last year. This decline was less than the anticipated drop of 2% but marked an improvement from February’s 8.4% decrease.
Trade Balance March Overview
In March, China recorded a trade balance of $102.64 billion. For the January to March period, dollar-denominated exports increased by 5.8% year-on-year, while imports fell by 7.0% year-on-year.
For the same quarterly period, China had a trade balance of $272.97 billion. These figures reflect changing dynamics in trade activity during this timeframe.
These figures reveal a somewhat telling divergence between outbound and inbound trade flows, with one side showing strength while the other continues to lag. When we examine the jump in exports — up 12.4% compared to last March — it’s not just a matter of outperforming forecasts; it’s also an indicator of firm external demand. This suggests the world continues to lean on Chinese production and manufacturing networks, possibly as inventories are being restocked or as delayed orders start to move again. It’s not seasonal noise either, given the considerable upward shift from the previous month’s modest 2.3% growth.
On the other side, imports fell again, this time by 4.3%. Although that’s narrower than February’s drop, it is still contractionary. The direction of that change points to ongoing softness in domestic demand or perhaps cautious restocking behaviour among Chinese firms. When domestic purchasing remains subdued while exports gain ground, it tends to send a very specific message about internal confidence — or the lack thereof. These types of diverging readings aren’t rare, but in this context, especially after the Lunar New Year lull, they pull into focus the forward-looking positioning of manufacturers and exporters in the region.
Significance Of The Trade Surplus
The trade surplus for March came in over $100 billion. That’s not trivial in scale, and when we zoom out to the first quarter, the surplus climbs close to $273 billion. These net figures speak plainly about pressures in the current account, and we can’t ignore how they may influence foreign exchange markets or policy response — even indirectly.
As we interpret these shifts, we should recognise that stronger-than-expected export growth acts as a support for risk-sensitive assets tied to global trade, particularly in places where correlations with Asian freight volumes remain intact. For us, this means monitoring forward indicators like container throughput, electronic component orders, and port activity will carry more weight in positioning.
In terms of positioning for the short term, we would not discount further volatility around assets sensitive to terms-of-trade balance shifts. The data also imply that any expectations of a sharp turnaround in internal demand should be delayed. We’ve seen similar quarters before where export strength masked softer domestic recovery — yet net trade still provided temporary support to output.
What this means in practice is that tactics based on sustained external demand may be more reliable than those premised on a broad domestic resurgence. We’ll be keeping an eye on upcoming import-related indicators — particularly intermediate goods — for any signs of restocking or policy-driven stimulus effects starting to take hold. For now, we take the export surge as confirmation of external resilience and would remain cautious on interpreting the reduced import contraction as a signal of broader strength — it’s too early to do that responsibly.
This setup may also accentuate policy divergence narratives and warrants close attention to regional monetary signals.
