China’s exports growth has tumbled to a two-year low, as the curbs introduced to battle Covid has hit factory production, disrupted supply chains and weakened domestic demand too. "The weakest level since June 2020," says SCMP. And metal prices fall (Global Market Headlines - Reuters)
Recession worries are swirling again this morning as China’s Covid-19 lockdowns, the Ukraine war, and the cost of living crisis all threaten the global recovery.
China’s exports growth has tumbled to a two-year low, as the curbs introduced to battle Covid has hit factory production, disrupted supply chains and weakened domestic demand too.
Exports slowed to 3.9% year-on-year in April, the weakest since June 2020.
Imports growth was flat (and imports from the US dropped by 1.2%), as cities such as Shanghai were shut down to fight virus outbreaks.
April’s data shows the impact of China’s latest Covid restrictions, including the tight lockdown in Shanghai which have lasted six weeks, disrupting the operations of companies including Tesla and Apple.
Julian Evans-Pritchard, senior China economist at Capital Economics, says weakening foreign demand hit China’s exports, suggesting rising prices are now hitting consumer spending,
“The sharpest falls were in shipments to the EU and U.S., where high inflation is weighing on real household incomes.
The declines were also especially pronounced in electronics exports which suggest a further unwinding of pandemic-linked demand for Chinese goods.”
Metal prices have dropped, as the drop in China’s export growth raised worries about future demand.
Reuters has the details:
- Benchmark three-month copper on the London Metal Exchange (LME) was down 1.8% at $9,250 a tonne, its lowest since December 15.
- LME aluminium slipped 1.3% to $2,804 a tonne, its lowest since January 4.
- The most-active June copper contract on the Shanghai Futures Exchange ended daytime trading down 1% at 71,440 yuan ($10,633.17), after dropping to its lowest since March 16.
