China’s exports slowed significantly in March, seeing a 2.5 percent increase in goods sent to the rest of the world as the country instead saw imports rise their fastest in more than four years.
The sourcing superpower’s exports totaled $321 billion during the month, according to China’s General Administration of Customs. The export growth marks a six-month low for China, with elevated energy prices stemming from the war in Iran likely weighing on foreign demand for goods.
Outbound shipments to the U.S. declining 26.5 percent to $29.4 billion, widening from an 11 percent annual decline in January and February. This was likely due to the heavy front-loading of goods from China last March ahead of the Liberation Day tariff announcement.
Related Stories
The global export figures missed Reuters-polled analysts’ median estimates for 8.6 percent growth, and represent a significant slowdown from the combined 21.8 percent surge in the first two months of the year.
Imports grew by 27.8 percent to $269.9 billion over the same period, leading to a monthly trade surplus of $51.1 billion. The import figures sharply surpassed Reuters projections of an 11.2 percent increase and were the biggest individual jump since November 2021.
China’s customs data was released the day before a report from the Financial Times said that the country demanded Mediterranean Shipping Company (MSC) and Maersk to relinquish operations of Panama’s Balboa and Cristóbal ports immediately.
The Panamanian government named both ocean carrier giants as the operators of the Panama Canal-adjacent ports after the country’s Supreme Court ruled Hong Kong-based conglomerate CK Hutchison’s contract to run the twin gateways was unconstitutional.
According to FT, China’s National Development and Reform Commission (NDRC) summoned the companies to a meeting early last month, where they insisted the shipping firms pull out of the Panama ports.
At the meeting, MSC and Maersk representatives were told not to “engage in illegal activities that harm the interests of Chinese companies, and to uphold commercial ethics and international rules,” the report said.
That meeting was purportedly held the same day the country’s Transport Ministry hosted talks with them, expressing concern over supply chain stability in the wake of the halting of traffic at the Strait of Hormuz.
Maersk CEO Vincent Clerc attended a meeting with NDRC officials in Beijing on March 20, FT said, while MSC president Diego Aponte has been communicating with the regulator through written correspondence.
The FT report followed an order from China’s State Council on April 7 signed by Premier Li Qiang, which empowers Beijing to more forcefully respond to foreign regulatory actions deemed harmful to Chinese interests.
The legislation targets “undue extraterritorial jurisdiction” by foreign governments, essentially expanding the Chinese government’s authority to impose retaliatory measures like asset freezes, fines, trade bans against entities and individuals deemed harmful to China’s interests.
China has appeared to take measures against Panama in recent weeks, having detained dozens of ships at its ports for inspection, prompting criticism from U.S. officials and further escalating tensions between the parties.
China’s relationship with Panama has been under strain since President Donald Trump returned to office last January. The U.S. president has sought to rid the Panama Canal and the wider Latin America region from any potential growing Chinese influence.
In the months following Trump’s inauguration, MSC and U.S. hedge fund BlackRock put in an offer to buy the two Panama ports from CK Hutchison in a package deal that would have transferred ownership of 43 terminals for $22.8 billion. That deal drew the ire of China, which held it up via an antitrust probe and sought for state-owned Cosco Shipping to be included.
Panama’s Supreme Court ruling ultimately derailed the transfer, as CK Hutchison no longer controlled the Balboa and Cristóbal ports.
MSC and Maersk will temporarily operate both ports for 18 months. Before that expiration date, the Panama Maritime Authority will host another open tender process to grant two separate firms long-term contracts to run the ports.
CK Hutchison has taken both Panama and Maersk to arbitration over claims that it was illegally pushed out of the contract, noting that the country unlawfully seized documents, property and equipment from the company in the process.
The Hong Kong company notably has not taken legal action against MSC. According to FT, Hutchison is still negotiating with the Swiss carrier and BlackRock on a potential deal to sell off the 41 non-Panama terminals.
As the drama surrounding China, the ocean carriers and the ports continues, the world’s second-largest economy’s strategy to diversify its trade partners is designed to soften the blows of ongoing geopolitical uncertainty.
Exports to the Association of Southeast Asian Nations (ASEAN) grew 6.9 percent to $63 billion, with Vietnam seeing goods from China jump 11.8 percent to $19.8 billion and Malaysia’s inbound shipments escalating 10.6 percent to $10.5 billion.
China’s exports to the E.U. increased 8.6 percent to $46.7 billion, while goods flowing to the U.K. inched up 3.4 percent to $6.8 billion.
