China's trade rebounds in May as anti-virus curbs ease

Beijing: China's trade growth rebounded in May after anti-virus restrictions that shut down Shanghai and other industrial centres began to ease.

Exports surged 16.9 per cent over a year ago to $308.3 billion, up from April's 3.7 per cent growth, a customs agency statement said on Thursday. Imports rose gained 4.1 per cent to $229.5 billion, accelerating from the previous month's 0.7 per cent. China's trade has been dampened this year by weak export demand and curbs imposed to fight outbreaks in Shanghai, 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.

Forecasters have cut estimates for China's economic growth to as low as two per cent this year due to the Shanghai shutdown, well below the ruling Communist Party's target of 5.5 per cent. 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. "Exports showed considerable resilience in May despite the impact of the protracted lockdown in Shanghai," said Rajiv Biswas of S and P Global Market Intelligence in a report. "The outlook for the second half of 2022 is for a stronger rebound in imports as domestic demand recovers."

China's politically sensitive global trade surplus widened by 82.3 per cent over a year earlier to $78.8 billion. That was among the highest monthly trade gaps but below December's record $94.4 billion. China's "zero-Covid" strategy that confined Shanghai's 25 million people to their homes starting in late March helped to keep case numbers low but disrupted manufacturing and trade and crushed consumer demand. The Port of Shanghai says the number of cargo containers handled each day returned to 95 per cent of normal by late May. However, a backlog of tens of thousands of containers is likely to cause delays that will be felt around the world. Import figures got a boost from higher global prices for oil and other commodities while the volume of foreign goods bought grew less strongly.

Authorities responded to complaints about the soaring cost of "zero-Covid" by switching to a more targeted approach of isolating buildings or neighbourhoods with cases instead of cities. But some areas covered by restrictions that have closed shops, factories and offices for weeks at a time have millions of inhabitants.