Robert Besser
13 May 2023, 09:04 GMT+10
BEIJING, China: Highlighting weakening domestic demand, despite the end of COVID-19 restrictions and increasing pressure on a struggling economy already facing cooling global growth, in April China's imports shrunk considerably while exports rose at a slower rate.
Due to strong demand for services, the world's second largest economy grew faster than expected in the first quarter, but factory output has slowed and the latest trade data indicate a long struggle to return to pre-pandemic economic levels at home.
Customs data released this week indicated that in April imports fell 7.9 percent year-on-year, extending the 1.4 percent decline from the previous month, while exports grew 8.5 percent, easing from the 14.8 percent rise in March.
"At the beginning of this year, one would assume that imports will easily surpass 2022 levels following the reopening, but that hasn't been the case," said Xu Tianchen, an economist at the Economist Intelligence Unit, as quoted by Reuters.
"While China's post-COVID rebound has been swift and sharp, it has been largely self-contained and not felt by the rest of the world," he added.
Chinese officials have warned of a "severe" and "complicated" external environment, due to a mounting recession risks facing many of China's key trading partners.
Amid the fragile recovery from the previous year, when inbound and outbound shipments were severely disrupted by China's COVID-19 restrictions, the sharp deterioration in last month's trade flows will only renew concern about external demand and the risks posed to the Chinese economy.
In a note, Zichun Huang, China economist at Capital Economics, said, "Given the gloomy outlook for external demand, we think exports will decline further before bottoming out later this year," as reported by Reuters.
After missing its 2022 GDP target, the Chinese government has adopted a range of policy support measures with the aim of achieving a modest GDP growth of some 5 percent this year.
"The global economy is deteriorating and will weaken China's manufacturing sector," added Iris Pang, chief China economist at ING, according to Reuters.
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