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At the same time the Chinese government is dealing with some of the nation’s largest protests in decades over its draconian COVID policies, the Middle Kingdom’s exports are dropping at their fastest rate in two years. Stella Yifan Xie and Yuka Hayashi report in The Wall Street Journal:
Chinese exports fell at the steepest pace in more than two years in November, the latest indication of how the country’s pandemic restrictions and waning global demand for goods is throttling China’s economy.
Outbound shipments from China plunged 8.7% year-over-year last month, the biggest dip since February 2020, when a nationwide lockdown ground economic activities to a halt. Economists polled by The Wall Street Journal had forecast a 2% drop.
The sharper-than-expected plunge comes amid weakening factory activity and a sluggish recovery in China’s property sector, adding pressure on Beijing to shore up economic confidence at home.
November’s data may also portend badly for the global economy, economists say, as a sustained slide in Chinese exports sends a signal that a boom in trade that powered global growth in 2021 is fading, adding to the risk of a recession. Central banks in the U.S. and other developed countries have been raising interest rates to tame inflation, dampening demand for Chinese goods.
The International Monetary Fund expects the global economic growth rate to slow to 2.7% in 2023, down from 3.2% projected for this year and 6% in 2021 as inflation cuts into economic activities and people’s living conditions.
In a meeting on Tuesday chaired by Chinese President Xi Jinping, top Communist Party officials called for a fine-tuning of the country’s Covid-19 restrictions and urged measures to boost market confidence and domestic demand. Officials have to “better coordinate pandemic prevention and the need for economic and social development,” according to the government’s readout of the Politburo meeting.
The pledge by Chinese policy makers to make economic stability a priority in 2023 is the most recent recognition of the economic toll from the country’s stringent Covid policy, which has crippled supply chains, stifled consumer spending and most recently, fueled mass protests across major cities in China. Economists now expect China’s growth this year to be the weakest in decades, excluding 2020, when the pandemic first struck.
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