China export growth at weakest in two years
China's export growth slowed to single digits in April, the weakest in almost two years, while imports were barely changed as tighter and wider Covid-19 curbs halted factory production and crimped domestic demand, adding to wider economic woes. Exports in dollar terms grew 3.9 percent in April from a year earlier, dropping sharply from the 14.7 percent growth reported in March although slightly better than analysts' forecast of 3.2 percent. It was the slowest pace since June 2020. Imports were broadly stable year-on-year, 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. The weak figures show China's trade sector, which accounts for about a third of gross domestic product, is losing momentum as lockdowns across the country ensnared supply chains in major centres like Shanghai, heightening risks of a deeper slowdown in the world's second-largest economy and beyond. "The virus outbreaks in China led to huge difficulties in the production chains and the supply chains," Chang Ran, a senior analyst at Zhixin Investment Research Institute said in a note on Monday. "Meanwhile, some countries in Southeast Asia 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 headwind to exports is weakening foreign demand. "The sharpest falls were in shipments to the EU and US, where high inflation is weighing on real household incomes," he said. "The declines were also especially pronounced in electronics exports which suggest a further unwinding of pandemic-linked demand for Chinese goods." Beijing's extraordinary 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 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 steep slowdown that could also hit global growth. (Reuters)