China’s economic data released on Sunday showed that imports shrank by 16.7% in April compared to the same period last year, while exports grew at a slower pace of 8.2%. This is a sharp contrast to March when both imports and exports rose significantly due to the lifting of COVID curbs and increased global demand for Chinese goods.
The contraction in imports signals weak domestic demand despite the easing of restrictions, which could further weigh on an economy already struggling with cooling global growth. The trade surplus widened from $42 billion in March to $62 billion this month as export growth slowed down sharply from 19% last month, indicating sluggish external demand for Chinese products amid rising tensions between Beijing and its trading partners, including Washington, over issues, such as technology transfer policies and human rights abuses.
Analysts expect China’s economic recovery will be slow going forward due to headwinds such as weaker foreign orders even if domestic consumption improves following vaccination campaigns across major cities like Shanghai and Beijing. To counter these challenges, authorities are expected to continue their efforts toward fiscal stimulus measures along with more targeted monetary policy support for small businesses hit hard by pandemic-induced lockdowns.
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