Automotive Exports August 2022

China’s trade rebounds
on easing virus curbs but
outlook still fragile
China’s trade growth rebounded in May,
official data showed , as factories restarted
and logistics snags eased after anticoronavirus
restrictions that shut down
Shanghai and other industrial centers
began to ease.
Exports grew at a double-digit pace,
shattering expectations in an encouraging
sign for the world’s second-biggest
economy, while imports expanded for
the first time in three months. The data
provided welcome relief to Chinese
policymakers as they try to chart an
economic path out of the supply-side shock
that has rocked global trade and financial
markets in recent months.
Exports surged 16.9% over a year ago to
$308.3 billion in May, up from April’s 3.7%
growth, a customs agency statement said.
Imports rose 4.1% to $229.5 billion, the
first gain in three months, driven by easing
logistics bottlenecks and imports of raw
materials and intermediate goods as
domestic production resumed.
Nonetheless, the outlook for China’s
exports, closely watched by investors as a
gauge of world economic health, still points
to risks from a monthslong Ukraine war
and rising raw material costs. Those same
factors, along with rising interest rates in
the United States and Europe, have raised
concerns about a global recession.
“We believe this recovery can continue if
there are no further lockdowns,” said Iris
Pang, Greater China chief economist at
ING, adding the rebound in both exports
and imports was mainly due to the port
recovery in Shanghai.
Zheng Houcheng, director of the Yingda
Securities Research Institute, said imports,
although beating forecasts, still reflected
sluggish domestic demand.
China’s trade has been dampened this
year by weak export demand and curbs
imposed to fight outbreaks in Shanghai, the
site of the world’s busiest port, and other
cities. Consumer demand for imports was
crushed by rules that confined millions of
families to their homes.
“If global demand continues to be as strong
as it has been since 2021, China’s exports
should maintain an average annual growth
rate of 15%, at least through 3Q22,” Pang
said.
Forecasters have cut estimates for China’s
economic growth to as low as 2% this year
due to the Shanghai shutdown, well below
the ruling Communist Party’s target of
5.5%. Some expect activity to shrink 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 need weeks or months to return to
normal activity levels.
Still, parts of Shanghai began imposing new
lockdown restrictions, with residents of
the sprawling Minhang district ordered to
stay home for two days in a bid to control
COVID-19 transmission risks.
Home to more than 2 million people,
Minhang will conduct nucleic acid tests
for all residents, and restrictions will be
lifted once the testing is completed, the
government said on its WeChat account.
“Exports showed considerable resilience in
May despite the impact of the protracted
lockdown in Shanghai,” said Rajiv Biswas of
S&P Global Market Intelligence in a report.
“The outlook for the second half of 2022
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