It was revealed today by Xi Jinping, who finally lifted large swathes zero-Covid restrictions.
The world’s second-largest economy was under pressure from weak global and domestic demand, Covid led to production disruptions and a property slump in the home.
The downturn was worse than the markets anticipated. Economists predict a period of further decline in exports. This will highlight sharp retreating in world trade as businesses and consumers cut back on spending due to central bank’s aggressive efforts to control inflation.
China – Weak trade data released this morning showing both exports and imports contracting at steeper rates in November imply challenging overseas demand conditions as well as Covid containment measures related issues at home.
- The decline also comes during a seasonally strong period when demand normally picks up ahead of the Christmas and holiday season overseas.
- Exports (%yoy): -8.7 v -0.3 October and -3.9 est.
- Imports (%yoy): -10.6 v -0.7 October and -7.1 est.
Official data revealed that exports fell 8.7% in November compared to a year ago. This was a sharper drop than the 0.3pc loss recorded in October. It also marked the worst performance since February 2020. They fell 3.5pc below analysts’ estimates.
Importers were also affected by the widespread Covid curbs. The sharp decline in imports was 10.6%, compared to a 0.7pc decrease in October. This was less than the 6pc forecasted drop. This was the worst downturn since May 2020.
This announcement comes as China announces today that it will be lifting a number of Covid-19 restrictions. Investors hope this will increase demand for the second-largest economy in the world.
This morning’s announcement includes limiting lockdown to specific apartment floors and buildings rather than whole districts and entire neighbourhoods.
