China follows a strict health policy against Covid, with almost daily screenings for the population, mandatory quarantines for people who test positive, or even lockdowns as soon as cases appear.
These measures, which generate a lot of uncertainty, put a brake on activity and consumption.
Last month, China’s exports fell 0.7% year-on-year, according to China Customs figures released on Monday.
This is the first time since May 2020 that this indicator is in the red.
China’s overseas sales have consistently remained positive in recent months, despite the slowdown in activity.
In September, exports had once again increased by 5.7% annually.
The threat of recession in the United States and Europe, combined with rising energy prices, is weakening demand for Chinese products.
covid and recession
“With the risk of a global recession, (China’s) exports are likely to weaken further” over the coming quarters, warns analyst Zichun Huang at Capital Economics.
This sector is one of the last engines of growth for the Asian giant.
Three years after the discovery of the first cases of Covid-19 in Wuhan (center), China is still entangled in the health crisis.
The country has recorded the highest number of positive cases in recent days since May, despite an uncompromising “zero Covid” policy.
With more than 5,000 additional positive cases on Monday, the numbers remain much lower than in the rest of the world.
Imports also at half mast
This deterioration in sanitary conditions has, however, an impact on Chinese purchases of foreign products.
Logically, imports from China also fell in October (-0.7% year-on-year), after a slight increase of 0.3% a month earlier.
The latest drop in imports dates back to March, shortly before the Shanghai lockdown.
Last month, Chinese President Xi Jinping reaffirmed the validity of his “zero Covid” health policy, despite the consequences for activity.
China will stick “unswervingly” to this strategy, health authorities insisted again on Saturday after days of speculation about an easing.
However, the poor business figures could serve as “leverage” for the authorities to review their health policy, believes the economist Ken Cheung, of the Japanese Mizuho bank.
Source: BFM TV
