Coronavirus: demand shock to ‘add frost to the snow’, as China’s trade economy struggles to recover

China set to feel force of an up to 32 per cent slowdown in global trade, according to World Trade Organisation calculations

Officials in Beijing increasingly open about the coming shock to the Chinese economy from the virus containment efforts elsewhere

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A worker uses a shovel in front of stacked shipping containers at the Yangshan Deepwater Port in Shanghai, China, on Monday, March 23, 2020. Photo: Bloomberg

Published: 8:15pm, 10 Apr 2020Updated: 9:48pm, 10 Apr 2020

The incoming global trade slump will “add frost to the snow” of China’s economic slowdown, as the country struggles to recover from its coronavirus-led shutdown, government officials said.

The World Trade Organisation (WTO) this week laid bare the bleak outlook for the year ahead, predicting a trade slowdown of up to 32 per cent, in its “worst case scenario” model.

And while China has been gradually reopening its own economy following a weeks-long lockdown after the Lunar New Year holiday, it is now facing a severe demand hit as its export markets follow suit in virus containment measures.

At a press conference in Beijing on Friday, Chinese government trade officials acknowledged once again the demand shock facing the economy – marking a growing trend among mandarins in the capital, who are speaking quite openly about the economic challenges.

The shift in rhetoric across a number of ministries this week could be intended to manage expectations as to the hardship ahead.

“The uncertainties and challenges of China’s foreign trade have increased significantly,” said Ren Hongbin, assistant minister of commerce. “A great many companies face cancellations of existing orders or delays, and most of their active orders are short-term, with few long-term ones.”

Ren added that overseas containment measures had led to a huge impact on global trade flows, but said the latest projections from the WTO were unusually pessimistic.