China’s Trade Picks Up As Lockdowns Ease

Daily throughput at Shanghai’s container port returned to 95.3% of normal levels in late May, even as China’s commercial capital remained under its two-month lockdown. That goes part of the way to explaining May’s rise in exports, up 16.9% year-on-year that the General Administration of Customs announced today, a marked improvement on April’s 3.9% growth.

Imports rose by 4.1% year-on-year in May, after being flat in March and April, but still a weak pace reflecting the broader second-quarter slowdown in China’s economy as lockdowns suppressed economic activity.

News that the Biden administration is looking to ‘reconfigure‘ tariffs on Chinese imports into the United States to help reduce inflation will boost Chinese exporters but insufficiently to offset the headwinds of slowing global GDP and trade entirely.

Import growth will also remain modest, even as lockdowns ease and authorities provide further fiscal and monetary stimulus to support the domestic economy.

However, lockdown easing is not the same as lifting. New measures were announced for one Shanghai district today and it looks, nationally, as if the country’s anti-virus infrastructure is continuing to be built out so that mass testing and quarantines can be sustained through 2023.

During his inspection tour of Sichuan, President Xi Jinping called for unwavering adherence to its zero Covid policy while at the same time striking a balance with the needs of the economy. His grouping of economic recovery, pandemic outbreak suppression and maintenance of social stability as co-objectives for officials particularly caught this Bystander’s ear.

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Filed under Economy, Politics & Society, Trade

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