China’s foreign trade rebounded in May, due to the easing of epidemic prevention measures in Shanghai and other major industrial centers in the country, according to Chinese customs data released Thursday.
Exports increased by 16.9% year-on-year to 308.3 billion dollars (more than 287 billion euros), above the 3.7% growth achieved in April. Imports increased 4.1% to 229.5 billion dollars (almost 214 billion euros), after increasing 0.7% the previous month.
china foreign trade this year was hampered by falling global demand and restrictions imposed in several cities and provinces, to prevent the spread of Covid-19 outbreaks, under the “zero cases” strategy.
Shanghai, home to the world’s busiest port, has suffered a two-month closure. Jilin province was also subject to highly restrictive lockdown measures. In Beijing or Guangzhou, the containment measures were partial.
The drop in domestic consumption, due to preventive measures, also imports affected in previous months.
Analysts cut estimates of China’s economic growth to as little as 2% this year, well below the official Communist Party target of “around 5.5%”.
Some analysts are forecasting a recession this quarter, before a gradual recovery begins.
Most factories, shops and other businesses in Shanghai, Beijing and other cities have been allowed to reopen, but you may need weeks or months to resume normal activity levels.
“Exports showed considerable resilience in May despite the impact of the prolonged Shanghai lockdown,” Rajiv Biswas of S&P Global Market Intelligence said in a report.
“The outlook for the second half of 2022 is one of further recovery in imports as domestic demand picks up“, he added.
China’s trade surplus increased by 82.3% year-on-year to 78.8 billion dollars (73.4 billion euros).
The port of Shanghai reported that the number of cargo containers it handles daily recovered to 95% of normal levels in late May.
However, the accumulation of tens of thousands of containers is likely to cause delays that will be felt around the world.
The combined value of imports was boosted by higher world prices for oil and other raw materials, but the volume of goods bought abroad grew more slowly.
Authorities have responded to complaints about the rising cost of the Covid-19 “zero cases” strategy through a more targeted approach, including isolating buildings or residential complexes where cases are detected, rather than shutting down entire cities.
China’s economy grew 4.8% in the first quarter of the year, year-on-year.
This represented an improvement over the 4% rate achieved in the last three months of 2021, but the economic indicators for the current quarter are dismal.
Car sales in April fell by almost half year over year. Spending in the retail sector fell 11%.
The Communist Party is trying to sustain growth with tax breaks for entrepreneurs, more accessible credit and the launch of public works. The World Bank warned this week that such policies could set back Beijing’s efforts to encourage consumption-led growth rather than debt-driven investment.
High indebtedness “carries more risks in the future”the World Bank’s chief economist for China, Ibrahim Chowdhury, said in a statement.
Source: Observadora
