China's imports and exports plunged to levels not seen since early 2020, official figures showed Wednesday December 7 as severe COVID 19 restrictions hit the economy hard.
China's snap lockdowns, travel curbs and mass testing have stifled business activity, disrupted supply chains and dampened consumption, and stifled consumption, as the last major economy wedded to a zero-tolerance virus policy.
In November, imports fell 10.6 per cent year-on-year, the biggest drop since May 2020, according to the General Administration of Customs.
Exports fell 8.7 per cent over the same period - the steepest decline since Feb 2020, when the country was mired in the early stages of the epidemic.
Bruce Pang, chief economist at Jones Lang LaSalle, told Bloomberg News that the deteriorating domestic and foreign demand, COVID disruptions and a rising comparison base lead to a perfect but well-expected storm to China's exports and imports.
The figures are the latest in a series of gloomy economic indicators, as the world's number two economy charts a faltering path out of zero-COVID.
China's factory activity shrank for the second consecutive month in November, as large swathes of the country were hit by lock-downs and transport disruptions, according to official data last week.
The Purchasing Managers' Index - a key measure of manufacturing - fell to 48.0 from 49.2 the month prior, well below the 50 point mark separating growth from contraction, according to the National Bureau of Statistics.
In November, the pandemic had a negative impact on the production and operation of some enterprises, production slowed and product order volumes decreased, the Bureau's senior statistician, Zhao Qinghe said.
He said that some suppliers complained of problems with transport and logistics, while demand from both the domestic and overseas markets fell.
Since the country's largest protests in decades last week, the country's ruling Communist Party took aim at lockdowns and other measures, and has signalled a shift in COVID messaging.
Local authorities have begun easing testing requirements and other restrictions, but travel between provinces is complicated and health measures vary from place to place.
Zhiwei Zhang, chief economist of Pinpoint Asset Management, said that the zero-COVID policy has been loosened but mobility has not recovered much on the national level.
He said that exports will be weak in the next few months as China goes through a bumpy reopening process.
China will have to rely more on domestic demand as global demand weakens in the year 2023. The Chinese leaders have set an annual economic growth target of about 5.5 per cent, but many observers think the country will struggle to hit it, despite a better than expected 3.9 per cent expansion in the third quarter.