More and more cities have been sealed off in recent weeks, including the important economic metropolis of Shanghai.
(Photo: dpa)
Beijing China’s export growth plummeted in April. As the Chinese statistical office announced on Monday, exports increased by only 3.9 percent year-on-year. In March they had risen by 14.7 percent. Export growth in April was thus as low as it had been in summer 2020 at the beginning of the corona crisis. There was almost no growth in imports in April.
A certain slowdown in foreign trade had already been expected this year because production capacities in other countries had recovered. Russian war of aggression in Ukraine has also affected exports. However, the most significant cause of the slump is the Chinese government’s draconian zero-Covid strategy, according to experts.
More and more cities have been sealed off in recent weeks, including the important economic metropolis of Shanghai. The draconian curfews have paralyzed production across the country and made the delivery of goods significantly more difficult if not impossible. Ships are backing up in China’s ports, and overland transport has also become very difficult because drivers are under curfews or do not have permits to cross provincial borders.
“China’s trade data for April has provided a glimpse into the impact of lockdowns in Shanghai and other parts of the country on global commodity markets,” said Eric Zhu, China economist at Bloomberg. The abrupt slowdown in export growth underscores the strain on global supply chains from disruptions to production and logistics.
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European companies with business in China are also affected by the severe and numerous lockdowns. In a recent survey by the European Chamber of Commerce in Beijing, 58 percent of companies said they had already lowered their sales expectations.
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According to current figures from the German Federal Statistical Office from the beginning of May, the problems in China were already putting pressure on German companies’ exports to the People’s Republic. Accordingly, exports to China fell by 4.3 percent in March.
“Due to the war in Ukraine and the Chinese government’s zero-Covid strategy, dark clouds are gathering over the German economy,” said Joachim Lang, CEO of the Federation of German Industries (BDI). The supply chain disruptions caused by the war in Ukraine and the People’s Republic of China’s zero-Covid strategy are having a massive impact on foreign trade, according to Dirk Jandura, President of the BGA Foreign Trade Association.
China’s economic recovery after the beginning of the corona crisis was mainly based on exports and infrastructure measures. At least foreign trade is now failing as a lifeline. The second largest economy in the world would have badly needed it.
In recent weeks, analysts have lowered their forecasts for growth for the full year in a row. The rating agency Fitch now only expects growth of 4.3 percent for the year as a whole. The International Monetary Fund (IMF) had previously lowered its forecast to 4.4 percent. The Chinese government, on the other hand, had set itself a growth target of 5.5 percent this year.
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