By JOE McDONALD – AP Business Writer
BEIJING (AP) — China’s trade growth rebounded in May after virus restrictions that shuttered Shanghai and other industrial hubs began to ease.
Exports jumped 16.9% a year ago to $308.3 billion, up from April’s 3.7% growth, a statement from the customs agency said on Thursday. . Imports rose 4.1% to $229.5 billion, accelerating from 0.7% the previous month.
China’s trade has been held back this year by weak export demand and restrictions imposed to fight epidemics in Shanghai, site of the world’s busiest port, and other cities. Consumer demand for imports has been crushed by rules that have confined millions of families to their homes.
Forecasters have cut estimates for China’s economic growth to 2% this year due to the shutdown of Shanghai, well below the ruling Communist Party’s target of 5.5%. Some expect activity to contract in the quarter ending in June before a gradual recovery begins.
Most factories, shops and other businesses in Shanghai, Beijing and other cities have been allowed to reopen, but are expected to take weeks or months to return to normal levels of activity.
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“Exports showed considerable resilience in May despite the impact of the prolonged lockdown in Shanghai,” Rajiv Biswas of S&P Global Market Intelligence said in a report. “The outlook for the second half of 2022 is for a stronger rebound in imports as domestic demand recovers.”
China’s politically sensitive global trade surplus rose 82.3% from a year earlier to $78.8 billion. It was one of the highest monthly trade spreads, but lower than December’s record high of $94.4 billion.
China’s ‘zero-COVID’ strategy, which confined Shanghai’s 25 million residents to their homes from late March, helped keep case numbers low, but disrupted manufacturing and trade and crushed consumer demand.
The Port of Shanghai says the number of cargo containers handled each day returned to 95% of normal at the end of May. However, a backlog of tens of thousands of containers is likely to cause delays that will be felt around the world.
Import figures were boosted by higher world prices for oil and other commodities, while the volume of foreign goods purchased rose less sharply.
Authorities have responded to complaints about the skyrocketing cost of “zero-COVID” by moving to a more targeted approach of isolating buildings or neighborhoods with cases instead of cities. But some areas covered by restrictions that have closed shops, factories and offices for weeks are home to millions of people.
China’s economy grew weakly by 4.8% year-on-year in the quarter ending March. This is an improvement from the 4% rate in the last three months of 2021, but economic indicators for the current quarter are dismal.
Auto sales in April fell nearly half from a year earlier. Retail spending was lower than forecast by 11%.
The ruling party is trying to support growth with tax refunds to contractors, easier credit and public works construction spending. The World Bank warned this week that “old playbook” policies could set back efforts to encourage growth based on consumption rather than debt-fueled investment.
High debt “stores other risks down the line,” the bank’s chief economist, Ibrahim Chowdhury, said in a statement.
As Shanghai reopens, many factories plan to split the workforce into two groups, with only one at work at any given time, to limit disruption in the event of further outbreaks and quarantines, according to industry groups. foreign companies.
“It will be at least months, if not years, before everyone who was working is back to work,” Carl B. Weinberg of High-Frequency Economics said in a report this week.
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