China's April Export Growth Rate Slows to 3.9%, Lowest in 2 Years

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Due to the lockdowns in major cities such as Shanghai under the zero-COVID policy, China's export growth rate has fallen to its lowest level in two years.

According to the General Administration of Customs of China on the 9th, China's exports in April amounted to $273.6 billion (approximately 348.5937 trillion KRW), marking only a 3.9% increase compared to the previous year. This is not only a significant slowdown from the 14.7% growth in the previous month but also the lowest growth rate since June 2020.

This year, China's monthly export growth rate has been steadily declining after recording 16.3% for January-February, which was announced once due to the Lunar New Year holiday. However, it exceeded Bloomberg's forecast of a drop to 3.2%.

China's imports in April were $222.5 billion, similar to the level in April last year. The monthly import growth rate recorded -0.1% in March, marking the first negative growth since August 2020, and has remained stagnant since then.

Accordingly, China's trade surplus in April was $51.1 billion, a significant increase compared to $47.3 billion in the previous month.

Regarding this, Hong Kong's South China Morning Post (SCMP) emphasized that "the strict city lockdowns starting in March have hit retail sales, production, and logistics, raising further doubts about the annual '5.5%' growth target."

Externally, SCMP observed that due to the war caused by Russia's invasion of Ukraine, global raw material prices have surged, causing China?the world's largest buyer of iron ore, crude oil, soybeans, and other products?to spend more. Additionally, tensions with the United States are clouding China's export outlook. The Federal Reserve's additional interest rate hikes have led investors to reduce their holdings of Chinese stocks and bonds, putting pressure on the yuan and the foreign exchange market.

Jiang Ziwei, Chief Economist at Pinpoint Asset, stated, "The sharp decline in export growth is due to the lockdowns in many cities, including Shanghai," and predicted, "Export growth may remain weak in May." He explained, "Due to supply chain disruptions, manufacturers have to reduce production, and there is still a high possibility of difficulties in importing parts for finished product manufacturing," adding, "Under the current situation, production resumption is expected to be very slow."

Meanwhile, China's imports from the United States in April decreased by 1.2% to $13.7 billion, while exports increased by 9.4% to $46 billion. China's trade surplus with the United States slightly increased from $32.086 billion in March to $32.2 billion in April.

The ten member countries of the Association of Southeast Asian Nations (ASEAN) maintained their position as China's largest trading partners, followed by the European Union (EU) and the United States. China's exports to ASEAN countries in March were $44.2 billion, up 7.6% year-on-year, and imports increased by 4.5% to $32.7 billion. Imports from the European Union decreased by 12.5% to $23.4 billion, while exports increased by 7.9% to $43 billion. China's trade surplus with the EU surged 49.6% year-on-year to $19.6 billion.

This content was produced with the assistance of AI translation services.