CITIC Securities: Disruption Intensity of US-Iran Conflict Exceeds Market Expectations; Domestic Exports Expected to Maintain High Momentum

Question: How does the conflict impact both the demand and supply sides of China’s exports?

[CITIC Securities: The disruption from the US-Iran conflict exceeds market expectations; China’s exports are expected to remain relatively strong] Caixin, March 22 — CITIC Securities research report states that the intensity of disruption caused by the US-Iran conflict has exceeded market expectations. No definitive resolution has been seen yet, and high oil prices may persist longer. China’s exports are expected to continue to maintain a relatively high level of prosperity. The US-Iran conflict has both demand-side negative effects and supply-side structural benefits for exports. Rising prices of traditional energy may boost demand for new energy products, and the “Three New” exports are expected to become an important driver. However, in the short term, the temporary disruption of the Strait of Hormuz may lead some oil and chemical companies to reduce or halt production, and China’s exports to Gulf Cooperation Council countries may also temporarily decline. CITIC Securities forecasts that although the March PPI is expected to turn positive, the People’s Bank of China will not tighten monetary policy as a result, but will continue to support expanding domestic demand. Regarding macroeconomic operation, the synchronized recovery of domestic and foreign demand in January-February 2026 is expected to drive production beyond expectations.