Jun 8, 2023 - Economy

China's exports disappoint as economic reopening remains sluggish

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

China's sluggish reopening woes continue, as its export sector struggles.

Why it matters: The world's second-largest economy is struggling to shake off the lingering effects of the pandemic and the harsh lockdowns it imposed in response.

  • In part, that's because China is returning to a very different world economy than the one that existed before COVID and the war in Ukraine.
  • Both events prompted countries around the world to reassess trade relationships and the risks of relying on rivals for core products.

State of play: That's a problem for China, where domestic activity has also been persistently weak. Industrial production, retail sales and capital investment were all softer than expected in April.

  • New numbers Wednesday showed the economy isn't getting much help from exports, a traditional source of strength for the manufacturing giant. Exports declined 7.5% in May, compared with May 2022.

Between the lines: The export figures reflect the ongoing strains between China and its major trading partners in the West.

  • China's exports to the U.S. were down 18% compared to May 2022.
  • Exports to Europe fell 26.6%.
  • On the other hand, exports to Russia — which has become economically reliant on China since its invasion of Ukraine prompted the West to sanction much of its economy — more than doubled.

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