China’s export growth slowed to single digits in April, while imports were unchanged as tighter and wider COVID-19 curbs halted factory production, disrupted supply chains and triggered a collapse in domestic demand.
Exports in dollar terms grew 3.9 percent in April from a year earlier, compared with the 14.7 percent growth reported in March and slightly beating analysts’ forecast of 3.2 percent. The growth was the slowest since June 2020.
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Imports were unchanged year-on-year last month, improving slightly from a 0.1 percent fall in March and a bit better than the 3.0 percent contraction tipped by the Reuters poll.
China posted a trade surplus of $51.12bn in the month, versus a forecast for a $50.65bn surplus in the poll. The country reported a $47.38bn surplus in March.
Beijing’s efforts to curb the country’s largest COVID-19 outbreaks in two years have clogged highways and ports, restricted activity in dozens of cities – including the commercial hub of Shanghai – and forced companies from Apple supplier Foxconn to automakers Toyota and Volkswagen to suspend some operations.
Factory activity was already contracting at a sharper pace in April, industry surveys showed, raising fears of a sharp economic slowdown in the world’s second-largest economy, which would weigh on global growth.
Shi Xinyu, a foreign trade manager in Yiwu, a commodities trading hub, said only 20 to 50 percent of shops are open due to COVID disruptions.
“[The weak import demand came amid] the downward economic cycle and COVID hit,” Shi said. “Life is already hard enough and it happens we’ve got a leaky roof as it rains.”
Additionally, heightened risks from the Ukraine war, persistently soft consumption and a prolonged downturn in the property market are also weighing on growth, analysts say.
With the national jobless rate at a near two-year high, authorities have promised more help to shore up confidence and ward off further job losses in a politically sensitive year.
Some analysts are even warning of rising recession risks, saying policymakers must provide more stimulus to reach an official 2022 growth target of about 5.5 percent, unless Beijing eases its draconian pandemic policy.
However, there are few signs of that happening. The country’s top leaders said last week they would stick with their “zero-COVID” policy, stoking worries of a sharper economic downturn.
A sharply depreciating yuan likely bolstered exports in April. The Chinese currency suffered its worst month in April in nearly two years as risks to the economy grow and touched a 1-1/2-year low.