Rolling coverage of the latest economic and financial news
- Introduction: China’s export growth slowed in May
- Experts blame chip shortage and Covid-19 outbreaks
- Imports surge, partly due to rising commodity prices
- Global G7 deal may let Amazon off hook on tax, say experts
Reuters also highlights how China’s export growth may have been hit by disruption at some major ports:
“Exports surprised a bit on the downside, maybe due to the COVID cases in Guangdong province which slowed down the turnover in Shenzhen and Guangzhou ports,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding that turnover at ports in Guangdong will likely remain slow in June.
Major shipping companies warned clients of worsening congestion at Shenzhen’s Yantian port in Guangdong province after the discovery of several cases among port staff.
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The global chip shortage, rising raw material costs and creaking supply chains are all weighing on the global economy as it tries to recover from the shock of the Covid-19 pandemic.
#Exports in dollar terms rose by 27.9 percent year on year in May to $263.9 billion, slower than the year-on-year growth of 32.3 percent seen in April, and missed the predictions of 32.1 percent by Reuters. #China pic.twitter.com/T5Gbh9vGCP
China’s exports grew by 27.9 per cent in May compared with a year earlier, while imports grew by 51.1 per cent last month #China #china #Trade #trade #import #export #imports #exports pic.twitter.com/JSPexizLqa
The main reason for the shortfall is that all export items related to semiconductor chips have slowed.
Auto processing products and parts, the biggest export item, fell 4%YoY in terms of export value. This is most likely the result of the semiconductor chip shortage.
Since the end of May, there have been around 10 Covid cases daily in Guangdong, where most electronics factories are located.
Shipments from the port in Shenzhen that process most of the electronic throughput have been affected by Covid. Port workers now have to have Covid tests and port operations have been disrupted. Some factories in Guangdong were also affected by Covid, mostly caused by workers queuing up for testing.
“Once again, supply constraints are partly to blame – inbound shipments of semiconductors continued to drop back.
So too did imports of industrial metals.”
Related: Global shortage in computer chips ‘reaches crisis point’
“This could turn out to be a false hope unless they get the detail right.”
Related: Global G7 deal may let Amazon off hook on tax, say experts
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