This month’s chart highlights the remarkable resilience of China’s exports, which continued to provide solid support to GDP growth in 2025, and appear poised to do so again in 2026. Notably, exports grew 21.8% year-on-year in January and February, driven by robust manufacturing activity.
China’s overall export growth has persisted—and even accelerated—since the tariffs imposed by the US on China were increased in April 2025. While the effective US tariff has fallen back from 140% to roughly 31% today, tariffs remain significantly higher than the ~11% level in place before President Trump’s second term. Nevertheless, the negative impact of tariffs has been largely confined to direct exports to the US, suggesting a substantial offset from exports to non-US markets and indicating a largescale trade diversion. China’s trade surplus reached a record high of USD 1.2 trillion in 2025.
Trans-shipments, expansion into non-US markets and the global technology upcycle have been key drivers of this export resilience. Chinese exporters have proactively established alternative manufacturing hubs overseas since Trump’s first term—a move that has proven highly effective. Concurrently, greater efforts have been devoted to expanding into non-US markets. Our estimates show that the contribution of non-US markets to headline export growth rose to 8.2 percentage points (pp) in 2025 (up from 5.4pp in 2024), and further increased to 23pp in January and February 2026. Additionally, China’s supply chain remains closely linked to the global technology upcycle, benefiting advanced manufacturing exports.
Against this backdrop, the Chinese authorities have shown little interest in scaling up policy support. The People’s Bank of China (PBoC) delivered only a 10 basis point policy rate cut in 2025, and the market is now pricing additional rate cuts out in 2026, given the strong export performance at the start of the year. On the fiscal side, with a lower growth target, policymakers are maintaining arrangements similar to last year, showing no enthusiasm for more expansionary fiscal support.
While some moderation in exports is expected for the remainder of 2026—and Middle East conflicts may trigger supply chain disruptions in the near term—China’s export performance has been more resilient than anticipated. China’s oil imports from Iran (11% in 2025) and the broader Middle East (53.4%) are diversified, reducing supply risk amid regional tensions. Domestic gasoline prices are tightly managed, limiting the inflation impact to upstream sectors.
Despite reliance on Middle Eastern industrial inputs, supply chain disruption risk remains low, and policymakers have tools to contain any shocks. As a result, oil volatility is unlikely to affect China’s GDP significantly. Considering the continued momentum in the technology cycle and the shift to green energy following the recent oil shock, it is possible that China’s exports will once again surprise to the upside.
(Source for all data: Wind, J.P. Morgan Asset Management; data as of March 2026).