HONG KONG (AP) — China’s exports expanded by 2.5% in March from a year ago, a significant deceleration from the previous two months, as global capital faced mounting uncertainties stemming from the Iran war and its impact on energy prices and overall demand. This slowdown in surplus extraction missed analysts’ estimates and marked a sharp drop from the 21.8% export growth recorded for January and February.
The deceleration in export growth reflects the volatile conditions impacting global capital accumulation. Economists from major financial institutions have pointed to the Iran war as a primary disruptor. Gary Ng, a senior economist for Asia Pacific at French bank Natixis, stated that “China’s exports have decelerated as the Iran war starts to affect global demand and supply chains.” Bank of America economists, led by Helen Qiao, noted in a recent research brief that demand is likely to weaken due to the war’s energy shock, warning of risks from a “persistent global slowdown in overall demand if the conflict lasts longer than currently expected.”
Global Capital's Shifting Sands
While exports slowed, imports last month surged 27.8%, an increase from the 19.8% year-on-year rise observed in the first two months of this year. This continued demand for inputs reflects ongoing production for global markets, even as export growth falters. Technology-related exports, including a jump in shipments of semiconductors, had powered robust exports in early 2026, driven by the global artificial intelligence boom, indicating specific sectors where capital continues to find avenues for expansion and surplus extraction.
The landscape for capital accumulation has also been shaped by inter-imperialist rivalries. U.S. President Donald Trump’s elevated tariffs on Chinese exports and ongoing tensions between Washington and Beijing have strained China’s shipments to the U.S. in recent months. In response, Chinese capital has sought new markets, stepping up its exports to other regions including Europe, Southeast Asia, and Latin America, demonstrating the relentless drive for market access and profit. Analysts are closely monitoring Trump’s planned visit to Beijing in May to meet with Chinese leader Xi Jinping, a meeting that was delayed due to the Iran war, underscoring the role of state actors in managing these geopolitical and economic tensions.
The State Manages Contradictions
Chinese leaders have set an annual economic growth target for 2026 of 4.5% to 5%, marking the lowest target range since 1991. This adjustment by the state reflects an acknowledgment of the systemic pressures on capital accumulation, both domestically and internationally. The state's role is to manage these contradictions to ensure the continued functioning of the economic order.
One year ago, China met its “around 5%” economic growth target for 2025, largely propelled by strong exports and a record high $1.2 trillion trade surplus. This surplus represents a massive transfer of value from global labor to Chinese capital. However, the current slowdown highlights the inherent instability of an export-driven model. Analysts now anticipate that exports will likely continue to be a key driver for maintaining economic expansion this year, serving to offset the deep structural weaknesses within the domestic economy. A prolonged property sector slump in China has weighed heavily on domestic demand and investments, revealing the internal contradictions of capital accumulation that necessitate reliance on external markets for growth. The state's efforts to maintain growth through exports, despite domestic weaknesses, underscore the systemic imperative to expand capital, even at a reduced rate.