China export growth weakens to 2020 low as Covid-19 lockdowns hit ports

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BEIJING (BLOOMBERG) - China's exports and imports struggled in April as worsening Covid-19 outbreaks cut demand, undermined production and disrupted logistics in the world's second-largest economy.

Export growth in April slowed to 3.9 per cent in dollar terms from a year earlier, compared with an increase in March of 14.7 per cent, customs data showed on Monday (May 9). That is the weakest pace since June 2020 but faster than the median estimate of a 2.7 per cent gain in a Bloomberg survey of economists.

Imports were unchanged in April after sliding 0.1 per cent in the previous month. Economists expected a 3 per cent decline.

Covid-19 outbreaks in China and the government's measures to contain them have weighed on China's economy and threatened global supply chains. Any threat to trade is a concern as exports have been one of the strongest growth drivers, helping propel the economy out of its Covid-19 slump in 2020 to a better-than-expected performance in 2021.

April's data captures the impact of pandemic restrictions on trade and manufacturing hub Shanghai - home to the world's largest port - where most of the population have been under some form of lockdown for more than five weeks. The government is trying to get production back on track, but with many foreign businesses saying they are still unable to resume operations and lockdowns tightening again, it is unclear how much of the city is actually back to work.

The Communist Party's top leaders have pledged more stimulus to meet an economic growth target of about 5.5 per cent this year, but they have also insisted on sticking with the strict zero-Covid-19 strategy - two goals that economists say contradict each other.

Other data from April has shown the extent to which Covid-19 disruptions bruised the economy. Manufacturing activity plunged to its worst level since February 2020, while logistics bottlenecks have continued to be a strain. Suppliers face the longest delays in more than two years in delivering raw materials to their manufacturing customers, and Chinese port activity fell below levels seen during the first coronavirus outbreak in 2020.

Global demand, meanwhile, appears to have stayed resilient last month, as South Korea's exports - a leading indicator of world trade - grew by double digits. South Korea's shipments to China, though, fell 3.4 per cent from a year earlier, compared with a 16.6 per cent gain in March. That suggests China's slowdown is more a product of its own Covid-19 restrictions, rather than weakening external demand.

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