China’s export growth hits 2-year low with lockdowns

Chinese export growth slowed to single digits, the weakest level in nearly two years, while imports barely changed in April as tougher and broader measures against Covid-19 affected factory production and domestic demand, heightening economic concerns.

Dollar exports grew 3.9% in April from a year earlier, down sharply from the 14.7% growth recorded in March, although slightly better than analysts’ forecast of 3.2%.

It was the slowest pace since June 2020.

Imports were flat from a year earlier, improving slightly from a 0.1% drop in March and slightly better than the 3.0% contraction expected by the Reuters poll.

The weak figures show that China’s commercial sector, which accounts for about a third of gross domestic product, is losing steam as lockdowns in major centers like Shanghai affect supply chains, raising risks of a deeper downturn in the economy. second largest economy in the world.

“Virus outbreaks in China have led to enormous difficulties in production chains and supply chains,” Chang Ran, senior analyst at Zhixin Investment Research Institute, said in a note on Monday.

“Meanwhile, some Southeast Asian countries have transitioned from recovery to production expansion, replacing Chinese exports to some extent.”

Julian Evans-Pritchard, senior China economist at Capital Economics, said the main obstacle to exports is weakening external demand.

“The sharpest drops have been in shipments to the EU and the US, where high inflation is weighing on real household incomes,” he said.

“The declines were also especially pronounced in electronics exports, which suggests a further decline in demand linked to the Chinese goods pandemic.”

Beijing’s extraordinary efforts to contain the country’s biggest Covid-19 outbreaks in two years have shut down highways and ports, restricted activity in dozens of cities, including Shanghai, and forced companies to suspend some operations.