A brake on Chinese exports. HASAt a time when the lockdown in Shanghai is severely hampering economic activity, the 3.9% increase in Chinese exports in April marks a clear slowdown, as this is the weakest increase since June 2000 (+0.5%). The contrast is striking compared to the month of April, when they were up 14.7%. Analysts had nevertheless expected a more pronounced decline with a rise of 3.2%. Faced with the unprecedented resurgence of the coronavirus epidemic, Beijing has imposed strict health measures, leading to bottlenecks in the country’s ports and highways, while reducing activity in dozens of cities, most notably the commercial center of Shanghai. The ongoing closure of the metropolis is weighing heavily on business in the country and global supply chains, while the shadow of containment hangs over the capital Beijing.
Imports remained stable, showing a slight improvement after falling 0.1% in March, beating the consensus of -3.0%. A year earlier, imports from China had risen 43.1%, amid economic catching up, after a virtual paralysis of activity during the first epidemic wave in early 2020.
China’s trade balance posted a $51.12 billion surplus last month, while analysts polled by Reuters had forecast a $50.65 billion surplus. In March, China’s surplus was $47.38 billion.
Beijing expects 5.5% growth in 2022
To relaunch growth stricken by health constraints, China is stepping up its actions to support the business without denying an expensive antivirus strategy. Threatened by sluggish growth, the Chinese government sent a reassuring signal to powerful digital companies in late April, battered since the sector’s brutal takeover in late 2020. limits that hinder its development.
To support the economy, Beijing has also outlined a large-scale work plan, at the risk of multiplying useless projects and increasing its debt. But China’s zero-covid policy, which involves repeated lockdowns and population testing as soon as cases appear, will continue despite high costs to the economy, President Xi Jinping emphasized.
Chinese economic capital remains cut off from the world today, severely hurting the Asian giant’s growth. As early as March, the technological metropolis of Shenzhen (south) was put under glass for a while, while the northeast of the country, industrial cradle and granary, was locked up for almost two months. These measures jeopardize Beijing’s 5.5% growth target in a politically sensitive year in which Xi Jinping must be reappointed as head of the second world economy. Many economists doubt the Asian giant will hit its target, which would mark China’s weakest growth since 1990, aside from 2020, the first year of the pandemic.
Faced with declining growth, Beijing also plans to support SMEs and car entrepreneurs, the main sources of employment, with tax measures and tax cuts. The government is also considering helping unemployed migrant workers, who are particularly vulnerable to economic hazards.
(with Reuters and AFP)