China’s imports shrank year-on-year last month for the first time in nearly two years, official data showed yesterday, hit by COVID-19 lockdowns and weakening consumer demand.
The world’s second-largest economy has stuck to a strict “zero COVID-19” strategy as it tries to contain outbreaks fueled by the Omicron variant of SARS-CoV-2 in recent months.
However, the economic costs have mounted — the waves of infections and resulting lockdowns have kept consumers at home, halted business operations and snarled supply chains.
Photo: Reuters
Data from the Chinese Customs Administration showed that imports dropped 0.1 percent from a year earlier, the first such decline since August 2020.
The figure was much lower than the forecast from a Bloomberg poll of economists, and a far cry from the 15.5 percent growth for the first two months this year.
“Some unexpected factors in the international and domestic environment have gone beyond our anticipation,” Customs Administration spokesman Li Kuiwen (李奎文) told reporters. “Achieving the goal of stabilizing foreign trade will require greater effort.”
China’s export growth slowed as well last month to 14.7 percent, down from 16.3 percent in the first two months of the year.
While Li did not specify external factors, the drop in exports came during a period in which Russia’s invasion of Ukraine and the shock waves from it have hurt business sentiment and consumer confidence globally.
“The March trade data highlighted the impact of pandemic-related disruptions on economic activity and consumer spending,” S&P Global Market Intelligence Asia-Pacific chief economist Rajiv Biswas said.
Recent lockdowns in major cities such as Shanghai and Shenzhen “hit consumer spending hard,” while the temporary shutdown of manufacturing plants affected demand for imported raw materials, he said.
China’s balance of trade was US$47.4 billion last month.
European demand for Chinese exports could be “a key risk,” given that “macroeconomic shocks from the Russia-Ukraine war, notably higher oil and gas prices and rising inflation pressures, are resulting in a downgraded EU GDP growth outlook in 2022,” Biswas said.
Exports of mechanical and electronic products in the first quarter rose 9.8 percent from a year ago, with increases in solar cells, lithium batteries and automobiles, Li said.
“The largest declines in outbound shipments were of electronics, furniture and recreational products, pointing to an unwinding of pandemic-linked demand for these goods,” Capital Economics senior China economist Julian Evans-Pritchard said.
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