China’s Covid blockade has disrupted operations in the world’s largest port (Shanghai) and shut down major cities, affecting corporate supply chains from Tesla to Apple, according to Bloomberg.
Monday’s trading data will give an indication of the extent of the loss. Chinese export growth is likely to have slowed to its weakest pace since June 2020, while imports are likely to shrink for a second month. This is a sign of weak consumer spending, as millions of people in Shanghai and elsewhere have been confined to their homes.
The turmoil in China is hurting the global economy and adding another risk to the inflation picture. In Shanghai, where most of the population has been under some form of exclusion for more than five weeks, the government is trying to get production back on track. However, many foreign companies say they are still unable to continue their operations.
The first indicators for trade are not promising. South Korea’s exports, a barometer of global demand, doubled in April, but shipments to China declined, suggesting that China’s slowdown was a product of Covid’s own constraints.
Source: Capital
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