China’s imports and exports last month plunged to levels not seen since early 2020, official figures showed yesterday, as stringent COVID-19 restrictions hit the economy hard.
The last major economy still wedded to a zero-tolerance virus policy, China’s snap lockdowns, travel curbs and mass testing have stifled business activity, disrupted supply chains and dampened consumption.
Imports fell 10.6 percent year-on-year, the biggest drop since May 2020, Chinese General Administration of Customs data showed.
Photo: AP
Exports fell 8.7 percent — the steepest decline since February 2020, when the country was mired in the early stages of the COVID-19 pandemic.
“Weakening domestic and foreign demand, COVID disruptions and a rising comparison base lead to a perfect, but well-expected storm to China’s exports and imports,” Jones Lang Lasalle Inc chief economist Bruce Pang (龐溟) told Bloomberg News.
The figures are the latest in a string of gloomy economic indicators as the world’s second-largest economy charts a faltering path out of its “zero COVID-19” policy.
The Chinese Communist Party (CCP) has indicated a shift in its COVID-19 messaging since the country’s largest protests in decades last week took aim at lockdowns and other virus curbs.
Local authorities have begun easing testing requirements and other restrictions, but travel between provinces remains complicated and health measures continue to vary from place to place.
“The zero COVID policy has been loosened, but mobility has not recovered much on the national level,” Pinpoint Asset Management Ltd (保銀私募基金管理) chief economist Zhang Zhiwei (張智威) said.
“I expect exports will stay weak in the next few months as China goes through a bumpy reopening process,” he said. “As global demand weakens in 2023, China will have to rely more on domestic demand.”
As Beijing shifts gears toward bolstering economic recovery, senior Chinese officials are debating an economic growth target for next year of about 5 percent, people familiar with the discussion said.
Some officials say that setting a goal at a relatively high level would help local governments shift the focus of their work away from COVID-19 controls to boosting the economy, the people said.
Other officials are concerned a target of about 5 percent could be too ambitious, they said.
The CCP’s Politburo, its top decisionmaking body, yesterday said in a statement that it would next year seek a turnaround in the economy and significantly boost market confidence.
“Growth is clearly more important for the leaders now,” Zhang said.
A growth target of about 5 percent “would be a signal to send this message to the public and local officials,” he added.
The GDP target would likely be discussed at the CCP’s Central Economic Work Conference, which usually takes place within a week of the Politburo’s meeting this month.
The GDP goal itself is only disclosed at the annual legislative meeting in March.
Additional reporting by Bloomberg
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