China's Exports Fall Amid COVID-19 Lockdowns

China's economy has taken the brunt of the governments strict zero-COVID policy which has affected exports and investment. This may leave China with a growth of 5% for this year, below the current target of 5.5%.
As the world’s second-largest economy, China’s recovery is paramount as its economic performance affects other economies and could further disrupt supply chains which in turn could lead to further inflation.

China saw a strong recovery in 2020 as the country contained the COVID-19 pandemic with both stimulus and surging exports playing a big role in this recovery. However, in April, China's consumption and factory output dropped to a rate that hasn’t been seen since early 2020, at the peak of the pandemic. Export growth dropped to 3.9% a by-product of factory shutdowns.

Economists forecast a considerably slowed growth in the second quarter as China continues to battle the pandemic. Meanwhile, analysts at Citi expect the economy to contract by 1.7% in the second quarter, leading the bank to cut its 2022 growth forecast to 4.2%.

#economy #business #china #covid

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