May 9, 2023 - Economy & Business

China's imports keep falling, in a sign of sluggish economic growth

Data: FactSet; Chart: Axios Visuals
Data: FactSet; Chart: Axios Visuals

Sluggish imports into China suggest that domestic demand in the People's Republic continues to struggle.

Why it matters: China is the world's second-largest economy and represents the single largest source of global economic growth. That means it's a key source of demand for everything from Chilean copper and Saudi crude oil to German automobiles and American soybeans.

The latest: Imports — a key gauge of an economy's domestic economic conditions — fell 7.9% in April, compared to April 2022, new data out this week show.

  • Context: The drop from last year was notable, since last year's import numbers were also weak due to COVID-related lockdown policies that hamstrung economic activity.

Details: Imports of key industrial commodities were particularly soft in April.

  • Soybean, copper and crude oil imports were all lower, compared to last year.

What they're saying: "It is becoming clearer that the reopening of the economy isn’t translating into robust import demand across the board for commodities," wrote analysts for Capital Economics in a client note.

The bottom line: As the chart above shows, the start of COVID in 2020 seems to be a major turning point in a trend that drove global growth for the last few decades.

  • Whether the country can regain momentum will remain a key focus for markets and economists worldwide.
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