By John Lee.
Iraq's trade surplus with China narrowed sharply in 2025, as imports from China rose while oil export revenues declined, according to data published by the Ministry of Trade.
The figures, compiled by the ministry's Directorate of External Economic Relations, show that Iraqi imports from China rose by 7.5 percent to approximately $17.02 billion in 2025, up from $16 billion in 2024.
Exports to China fell by 11.3 percent, to $33.09 billion from $38.02 billion the previous year. As a result, total bilateral trade volume declined by 5.7 percent, and the trade surplus contracted by 24.08 percent.
Import growth was led by industrial goods, with notable increases across several categories:
- Vehicles and transport equipment: up 21.4 percent
- Electrical and electronic appliances: up 17 percent
- Machinery and heavy equipment: up 10.09 percent
- Ready-made clothing: up more than 24 percent
- Aluminium and aluminium products: up 45 percent
The ministry attributed the growth in Chinese imports to lower costs and greater product diversity compared with competitors, flexible supply chains, and improvements in quality and technology. In the vehicles sector specifically, the expansion of local dealerships, the availability of maintenance services and spare parts, rising domestic demand for private transport, and the weakness of public transport alternatives were cited as contributing factors.
The data indicate that while the Iraq-China trading relationship remains robust, it is gradually shifting towards a relative imbalance, driven by declining oil export revenues alongside rising imports. The ministry noted that this presents policymakers with a dual challenge: diversifying exports and strengthening domestic production in order to ease pressure on the trade balance and ensure its medium-term sustainability.
(Source: Ministry of Trade)
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