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Exports dropped 8.7% in November as global economy slows
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Imports fell more than 10%, the worst result since May 2020
China’s trade plummeted in November to the lowest levels since the early days of the COVID-19 pandemic, according to official figures, underscoring the heavy economic toll of Beijing’s “zero COVID” policies. Imports fell 10.6 percent year-on-year while exports dropped 8.7 percent, Chinese customs data showed on Wednesday. The slump in trade marks the steepest decline in imports and exports, respectively, since May 2020 and February 2020. The weak figures come after China’s factory activity shrank for a second straight month in November as rising COVID cases prompted authorities to impose new restrictions in big cities including Shanghai, Beijing and Chengdu. China’s strategy of lockdowns, mass testing and border closures has upended supply chains and kept consumers at home, while fears of a recession in the United States and Europe have dampened overseas demand for Chinese products. China’s economy is expected to grow about 3 percent in 2022, which would be far below an earlier government target of about 5.5 percent and rank among the country’s worst performances in decades. Following rare anti-“zero-COVID” protests last month, Beijing has begun to downplay the severity of newer COVID variants and local authorities across China have loosened some restrictions. But analysts have cautioned that a quick reopening is unlikely given the country’s poor vaccine coverage among the elderly and lack of natural immunity. Beijing last week unveiled plans to vaccinate millions of Chinese in their 70s and 80s, in an apparent effort to tackle a key stumbling block to living with the virus. Only 40 percent of Chinese over 80 have received a third dose of vaccine, according to the National Health Commission – far fewer than in other countries.
China Nov passenger vehicle sales drop 9.5%, first fall in six months
SHANGHAI, Dec 8 (Reuters) – China’s passenger vehicle sales fell for the first time in six months in November and are expected to stay flat next year, an industry body said on Thursday, as demand weakens faster than expected, even as stringent COVID rules are eased. Vehicle sales last month fell 9.5% from a year earlier to 1.67 million units, the first decline since May, according to the China Passenger Car Association (CPCA). Many large cities imposed some form of lockdowns last month as COVID-19 cases rose. “The November sales were far worse than previous expectations,” Cui Dongshu, the CPCA’s secretary general, told an online briefing.
“The current trend is unprecedented since the financial crisis in 2008,” he said, while adding that the significant change in China’s COVID policies in recent days means that the three-year pandemic is almost over, which should restore consumer confidence.
China has started easing anti-virus measures after public frustration boiled over late last month, sparking protests against COVID controls that were the biggest demonstration of public discontent since President Xi Jinping came to power in 2012. But analysts say economic activity will take some time to recover. The association said it expects passenger vehicle sales to reach 20.6 million units next year, flat from 2022, a forecast more optimistic than some street views. Analysts at China Merchants Bank International expect retail passenger vehicle sales in China, the world’s biggest car market, to drop 6% next year due to the expiry of a purchase-tax cut. Even with easing COVID restrictions, the sales outlook remains subdued as car makers grapple with rising inventories of unsold vehicles. After two more years of struggling under COVID, China’s working class people have seen their wealth and consumption power shrink, Cui said, adding that no sudden jump was expected in December car sales despite the relaxation of virus measures. One suggestion made by the association was to extend a purchase tax cut for small engine cars, due to expire at the end of this month, to at least June to help buffer the demand slump, he said. U.S. electric vehicle maker Tesla planned to cut December output of its Model Y at its Shanghai plant by more than 20% from the previous month, two people with knowledge of electric vehicle maker’s production plan said on Monday. A Tesla representative called it “false news” without elaborating. The company, whose Shanghai plant is grappling with elevated inventory levels, is offering a limited-time discount of 6,000 yuan ($859) to buyers in China on some models from Wednesday through to the end of 2022, in addition to a previously announced 4,000 yuan insurance subsidy and an up to 9% price cut in October. Tesla sold 100,291 China-made cars in November, including 37,798 for export, the CPCA said. Auto industry officials had expected consumers to rush to buy at the end of the year, before government subsidies and the purchase tax cut expire. But the incentives did little to boost vehicle sales in recent months, as many COVID restrictions remained in place. Foreign brands saw even sharper sale slumps in November, with Japanese brands the weakest among them, said Cui. November sales of Toyota Motor Corp (7203.T) in China fell 18.4% from a year ago, while Nissan Motor (7201.T) saw a 52.5% drop in its sales. NN: It is obvious China still suffers the economic consequences of the COVID lockdowns. What you must understand is this COVID season is different. Its a mutation that is more infectious but less deadly. Which means China will be opening up in the next 90 days. As is often the case they are opening up to soon. We shall see how this plays out.