China's imports of liquefied natural gas fell by 10.6% in volume and 22% in value. In contrast, the value of China's rare earth imports more than tripled last month, while soybean imports grew modestly by 20% in volume. High commodity and energy prices, resulting from the conflict, are beginning to impact input costs for Chinese manufacturers, threatening to negatively affect the already slim profit margins of companies. Factory gate prices in the country rose by 0.5% in March, marking the first increase in over three years. Nevertheless, the consumer price index rose by only 1%, a lower rate than expected compared to the previous year, due to domestic demand remaining under pressure. China is scheduled to announce its first-quarter GDP on Thursday. Net exports accounted for about a third of China's economy last year. While Beijing's strategic oil reserves, energy source diversification, and strict price controls have mitigated the impact of rising oil prices, the export-dependent economy remains vulnerable to a global economic contraction caused by the prolonged closure of the Strait of Hormuz. At a press conference on Tuesday, Wang Jun, China's Deputy Minister of Customs, stated that global oil prices have experienced "sharp fluctuations," creating a "complex and difficult" business environment. Oil imports China's crude oil imports decreased by 2.8% in volume and approximately 4.4% in US dollar value in March compared to the previous year, according to CNBC calculations based on official trade data. China's export growth slowed in March as manufacturers faced rising costs of basic goods and energy due to the conflict in the Middle East affecting supplies, while imports showed the strongest growth in over four years. Data from Chinese Customs, released on Wednesday, showed that exports grew at the slowest pace in six months, at 2.5% in US dollars last month compared to the previous year, which is below the average analyst forecast polled by Reuters of 8.6%, and also weaker than the overall increase of 21.8% in the first two months of the year. Shipments to the United States, China's largest trading partner, fell by 26.5% on a yearly basis. Conversely, imports rose by 27.8% in March compared to the previous year, marking the strongest growth since November 2021, significantly exceeding forecasts of an 11.2% increase and accelerating from the 19.8% rate recorded in the previous two months. China publishes combined trade data for January and February due to potential fluctuations during the country's biggest holiday, the Lunar New Year, which follows the lunar calendar. Tariffs The world's second-largest economy still relies on trade for its growth, despite escalating tensions with the US and rising tariffs. Analysts polled by Reuters estimate a 4.8% increase, compared to a three-year low of 4.5% in the last quarter of 2025.
