Chinese export growth weakens to 2020 low

(Bloomberg) — China’s exports and imports struggled in April as worsening Covid outbreaks slashed demand, undermined production and disrupted logistics in the world’s second-largest economy.

April export growth in dollar terms slowed to 3.9% from a year earlier, compared with a 14.7% rise in March, customs data showed on Monday. That’s the weakest pace since June 2020, but beats the median estimate of a 2.7% rise in a Bloomberg survey of economists.

Imports were flat in April after falling 0.1% in the previous month. Economists had expected a 3% drop.

The April data captures the impact of Covid restrictions on the commercial and manufacturing hub of Shanghai, home to the world’s largest port, where most of the population has been under some form of quarantine for more than five weeks. The outages add another threat to global supply chains and inflation, and have affected the operations of companies such as Tesla Inc. and Apple Inc.

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Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, said export growth could remain weak in May due to supply chain disruptions.

“A big macro issue is to what extent export orders will shift to other emerging countries like India and Vietnam,” he said.

China’s government is trying to get production back on track, but many foreign companies say they still can’t resume operations and lockdowns are tightening. It’s unclear how much of the city has actually returned to work.

Slowing trade is a concern as exports have been one of the strongest growth engines for China, helping propel the economy from its Covid-related slump in 2020 to a better-than-expected performance in 2021. .

effects of inflation

Imports were boosted by high energy and commodity prices. The value of coal imports increased by almost 80% in the first four months of the year, while the volume of incoming shipments fell by 16%. The value of crude oil, natural gas and steel also increased, while volumes fell.

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Russia’s imports rose nearly 57%, likely boosted by rising prices for oil, gas and other raw materials, which make up the bulk of what China buys from Russia. The biggest falls in exports in April were those to Russia. Shipments fell 26% from a year earlier, followed by Hong Kong, the UK, Japan and Germany. Exports to the United States increased by 9.4%.

China’s trade slump came despite signs that global demand likely held resistance last month. While South Korea’s exports — a leading indicator of world trade — grew by double digits in April, its shipments to China fell 3.4%.

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