2023-05-09 14:54:43
Chinese imports contracted sharply in April while the pace of export growth slowed, reinforcing signs of weak domestic demand despite the lifting of COVID-19 restrictions and putting pressure on an economy already struggling in the face of slowing global growth. China’s economy grew faster than expected in the first quarter thanks to strong consumption of services, but factory production slowed, and the latest trade figures suggest that a return to pre-pandemic levels at the domestic level still has a long way to go. Customs data on Tuesday showed imports in the world’s second-largest economy fell 7.9 percent year-on-year, following declining 1.4 percent the previous month, while exports grew 8.5 percent, compared with a 14.8 percent jump in March. Economists polled by Archyde.com predicted no growth in imports and an increase in exports of 8 percent. Government officials have repeatedly warned that the external environment is “harsh” and “complex”, in the wake of rising recession risks for several of China’s major trading partners. However, the sharp deterioration in trade flows last month will only lead to renewed concerns regarding the state of external demand and risks to the domestic economy, given the fragility of the recovery from last year when incoming and outgoing shipments were severely disrupted by anti-COVID-19 restrictions. “Given the gloomy outlook for external demand, we believe exports will continue to decline before bottoming out later this year,” Qi Chunhuan, China economist at Capital Economics, said in a note. She added, “We still believe that the recovery of domestic demand due to the lifting of restrictions will lead to a recovery in imports in the coming months.” China’s coal imports fell in April following hitting a 15-month high in the previous month, as demand in the Asian giant slumped. Copper and natural gas imports also declined in the same period. The official purchasing managers’ index for the manufacturing sector in April showed a sharp contraction in new export orders, highlighting the challenge faced by Chinese policymakers and companies hoping for a strong economic recovery following the pandemic. The government has set a modest target for GDP growth of regarding 5 percent for the current year, following a major failure to achieve the growth target for 2022.
Source: Archyde.com
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