China Looks to Move Away from Strict COVID-19 Restrictions as Imports, Exports Slow

Chinese leaders are considering steps toward reopening after nearly three years of tough pandemic restrictions.

Chinese officials have grown concerned about the costs of their zero-tolerance approach to smothering Covid-19 outbreaks, which has resulted in lockdowns of cities and whole provinces, crushing business activity and confining hundreds of millions of people at home.

But they are proceeding slowly, weighing potential costs of reopening for public health and support for the Communist Party.

Big Trouble in Little China

The news comes as Chinese health officials over the weekend said that China would stick to its zero-COVID-19 strategy as the country reported its highest number of new infections in six months.

However, the Hang Seng index in Hong Kong climbed 2.7% on Monday, with investors seemingly still betting on a relaxation of restrictions, which turned out to be right.

Can China Afford More Further Lockdowns?

China’s growth in exports fell for the first time in more than two years in October, as demand declines on rising risks of a global recession.

The weakness in exports adds to the pressure on the economy, which is struggling due to the property market slump, persistent disruptions from COVID-19 controls, and weak consumer spending.

Data released on Tuesday also show Taiwan’s exports fell 6% in October, according to economists' estimates.

China's Imports Slow

While the country's exports take a downturn, so have China's imports.

China soybean imports fall to lowest in eight years in October. China imported 4.14 MMT of soybeans in October, matching the lowest for any month since October 2014.

Chinese soybean imports plunged 46.4% from September and were 19.0% below year-ago as weak crush margins reduced demand.

Through the first 10 months of this year, China imported 73.18 MMT of soybeans, down 7.4% from the same period last year.

China’s meat imports also slowed in October. China imported 630,000 MT of meat last month, down 20,000 MT (3.1%) from September and 30,000 MT (5.1%) less than last year.

China doesn’t break down meat imports by class in its preliminary data, though the reduction was due to fewer pork imports.

Through the first 10 months of the year, China imported 6.03 MMT of meat, down 25.0% from the same period last year.

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