Editorial | Chinese Premier Li Qiang has his work cut out as the economy stutters
- Key data for May proves disappointing and many challenges remain, but China still has some tools in the shed to turn things around
If ever a key economic statistic should have given a flattering picture of China’s economic growth, it was last month’s trade figures when compared with the same month last year. In May last year Shanghai, the country’s economic centre and global trade hub, was in the second month of Covid lockdown.
Normal commercial life was paused. It has been restored for more than 11 months.
The value of exports in May this year compared with the previous May was therefore expected to reflect that. Instead it fell, painting a dire picture of stalled economic recovery.
May exports, measured in US dollars, fell by 7.5 per cent, thanks to lower overseas demand, and imports by 4.5 per cent year on year. Over the 12 months the dollar strengthened by 6.7 per cent against the yuan.
Measured in yuan, exports fell by 0.8 per cent and imports rose by 2.3 per cent. Regardless, the figures convey a worrying message of tentative recovery at best.
That underscores the need for the government to put growth and job creation and security front and centre of policy planning. There is little consensus in the market about what to expect from the economy in the immediate future.