China’s export growth slowed in April following Shanghai, and other industries were closed to combat the spread of viruses.
Beijing (AP) -China’s exports slowed in April as demand decreased, putting pressure on the world’s second-largest economy. Its economy suffered after Shanghai and other cities in the industrial sector were shut down to combat viruses that spread.
Exports grew 3.7 percent one year ago to $273.6 billion, down from March’s 15.7 percent increase, the customs data revealed Monday. A sign of the weak Chinese consumption, exports climbed 0.7 percent up to $222.5 billion, which is under the prior month’s growth of less than one percent.
The demand for Chinese exports is strained due to high inflation and increases in interest rates across the United States and other major markets, and consumer concerns regarding China’s economy and the outlook for jobs.
Investors and companies are concerned that the communist party’s “zero-COVID” strategy that temporarily shut down most firms in Shanghai and other industrial cities could disrupt trade in the world and activity in the auto electronic and other sectors.
“Virus disruptions continued to take a toll, but the main headwind to exports is weakening foreign demand,” said Julian Evans-Pritchard from Capital Economics. “We expect export volumes to fall further over the coming quarters.”
Forecasters anticipate Chinese industrial activity to rise this month as the spread of infections decreases. Still, President Xi Jinping, last week affirmed Beijing’s determination toward “zero-COVID,” prompting expectations that it could impact manufacturing, trading, retailing, and trade.
Despite lingering tariff hikes amid a dispute over Beijing’s tech goals, imports into the United States rose 9.5% to $46 billion. Imports of American products grew by 0.9 percent, up to $13.8 billion.
China’s trade surplus increased by 19.4 percent to $51.1 billion, while the unstable trade surplus between China and China and the United States contracted by 65 percent to $9.8 billion.
The numbers of Chinese cases from its recent outbreaks are comparatively small. Yet, Beijing’s insistence on isolating everyone infected left most of Shanghai’s 25 million inhabitants restricted to their homes. Access to Guangzhou as the center of trade and manufacturing to the southwest and the industrial hub of Changchun to the north region was shut down.
Authorities have relaxed their controls in Shanghai and have allowed millions of people to leave their homes. However, restrictions have increased in Beijing and other cities.
The Port of Shanghai managers, one of the world port’s largest ports, claim its operating average. However, the figures they provide for the daily cargo volumes it handles are 30% of what they would usually. Shippers have said they’re avoiding the port due to concerns there aren’t enough truckers who can transport their goods.
Automobile factories and other manufacturing companies that tried to continue operating by allowing employees to live on their premises were forced to cut or cease production because supplies of components were interrupted.
The Chinese economy expanded by just 4.8 percent over an earlier month that ended in March, up from 4% in the third quarter of 2024. The economists have warned that there will be a more significant downward pressure on growth in the April-June period due to the anti-virus control.
The demand for imports by consumers has been lowered through a government-sponsored campaign to reduce debt in China’s massive real estate industry that provides thousands of jobs. The result was a slowdown in economic growth during the second half of 2024.
The weak Chinese demand could be a global issue, affecting imports of steel ore and industrial parts, and consumer products.
Exports from the 27 countries of the European Union increased by 8.8% to $43.1 billion, while imports of European products increased 12.5 percent in value to $23.4 billion. China’s trade surplus with Europe has risen by 49.6 percent in the range of $19.6 billion.
Imports into Russia, an important gas supplier, rose 56.6 percent over the previous year up to $8.9 billion, reflecting the rise in prices of energy due to fears about supply disruptions caused by Russia’s war on Ukraine.
Beijing has expressed its displeasure about financial and trade sanctions that have been placed upon Moscow through China, the United States, Europe, and Japan. However, Chinese businesses seem to be adhering to these rules while trying to safeguard against potential losses in their business dealings with Russia.
