China: Exports anchor growth as Middle East risks rise – UOB

UOB economist Ho Woei Chen highlights that strong China exports and imports in early 2026 are supporting growth, with clear diversification away from the US toward ASEAN, EU and regional partners. The report notes rising commodity import volumes and potential disruptions from Middle East tensions, but still projects positive 2026 growth for China’s exports and imports in US Dollar terms.

Trade strength offsets geopolitical headwinds

"China’s exports and imports surged in Jan-Feb, up from single-digit growth pace in Dec and were well-above Bloomberg’s consensus forecasts. In USD-terms, exports jumped by 21.8% y/y (Bloomberg est: 7.2%, Dec: 6.6%) while imports rose 19.8% y/y (Bloomberg est: 7.0%, Dec: 5.7%). The trade surplus recorded US$213.62 billion in Jan-Feb, significantly higher than US$169.21 billion in the same period of 2025 though the average for the two months at US$106.81 billion was lower than Dec’s US$114.11 billion due to stronger imports."

"The strong exports data suggests that external demand has continued to anchor China’s economic growth in the first two months of the year. China’s exports continued to pivot towards non-US markets."

"In volume terms, China’s purchase of commodities including metals (copper ore and iron ore) and energy products (coal, crude oil and refined petroleum products) strengthened YTD as of Feb. This points to inventory building as geopolitical tensions in the Middle East were rising."

"For 2026, we expect China’s exports and imports to maintain a positive growth of 2.8% (2025: 5.5%) and 2.0% (2025: flat) respectively."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)