Asian markets plunged on Wednesday, led by a dramatic selloff in South Korea, as investors rushed to unwind chipmaker bets amid rising fears that a prolonged Middle East war could trigger a sustained energy shock. South Korea Triggers Circuit Breaker KOSPI Index slumped more than 11%, prompting a circuit breaker. Two-day losses widened to 17% — the steepest since 2009 . The Korean won dropped to a 17-year low , compounding market stress. Elsewhere: Nikkei 225 fell 4.3% Taiwan stocks dropped 3.6% S&P 500 futures slipped 0.6% Key Point: Heavy profit-taking in semiconductor stocks amplified the regional selloff. Chipmakers had been among the hottest trades in recent months, driven by AI demand. Investors are now cashing out of crowded positions. Oil Surge Drives Inflation Fears Brent crude rose more than 13% this week to US$82.08 per barrel. Prices retreated slightly after Donald Trump ordered insurance guarantees for Gulf shipping and signalle...
China’s trade volumes surged to record levels at the start of 2026, but escalating tensions in the Middle East now pose fresh risks to global shipping and export momentum.
Key Takeaways
China’s trade volumes surged above last year’s record levels before the Iran conflict erupted.
Over 59 million containers were processed in the first nine weeks of 2026, up more than 12% year-on-year.
Escalating tensions around Iran now threaten Middle East demand and global shipping routes.
Record Container Throughput in Early 2026
More than 59 million containers moved through Chinese ports in the first nine weeks of the year — up over 12% year-on-year, according to the Ministry of Transport.
The strong start extended the export surge seen in late 2025, when total outbound shipments reached US$3.8 trillion, a record high.
Goldman Sachs Group Inc. noted that freight volumes from 20 major Chinese ports also exceeded 2025 levels.
Key Point: China’s trade momentum was accelerating before geopolitical tensions introduced fresh uncertainty.
Export Surge Driven by Diversification
China’s exporters have been expanding into new markets to offset US tariffs under Donald Trump.
The trade boom helped cushion China’s domestic slowdown, with exporters finding alternative destinations beyond the US.
However, the escalating Iran crisis threatens to:
Weaken demand from Middle Eastern markets
Disrupt shipping routes near the Persian Gulf
Increase delivery times and freight costs
Major container carriers are already rerouting ships away from high-risk areas.
PMI Signals Mixed Momentum
While official trade data for January–February will be released soon, early indicators show mixed trends:
The private RatingDog PMI pointed to improved manufacturing activity in January
Official manufacturing PMI showed export orders falling deeper into contraction
Key Point: Manufacturing activity improved, but export orders remain fragile.
Policy Shift May Trigger Shipment Rush
China will reduce export tax incentives from April 1, a move aimed at promoting industry consolidation and easing global trade tensions.
Longi Green Energy Technology Co. warned that exporters may front-load shipments before incentives are withdrawn, potentially followed by a sharp drop in volumes.
Outlook
China entered 2026 with strong trade momentum. However, the Iran conflict introduces new risks to shipping routes, energy prices and regional demand.
Overall theme: Record-breaking trade momentum now faces geopolitical headwinds that could disrupt China’s export engine.
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