China’s industrial cities are imposing shutdowns to fight the Covid epidemic, and the measure has wreaked havoc on factory production and domestic demand.

The economic fallout is reflected in China’s newest trade data.

Citing the customs data released on Monday, The Associated Press reported that China’s export growth slowed to 3.7% in April, much lower than March’s 15.7% rate.

China’s imports inched only up 0.7% in April, in line with the previous month’s growth below 1%.

The trade sector accounts for about a third of China’s gross domestic product. The bleak data show that China’s trade continued to lose momentum due to the Covid lockdowns, reflecting weak domestic demand.

Under the zero-Covid policy, China forced industrial cities, including financial hub Shanghai, to temporarily shut down their most businesses.

Investors and companies worry that the lockdowns would disrupt activity in autos, electronics, and other industries.

Julian Evans-Pritchard, a senior economist at Capital Economics, wrote, “Virus disruptions continued to take a toll, but the main headwind to exports is weakening foreign demand.”

He forecasts China’s exports will continue to fall over the next quarter.

On Monday, senior analyst Chang-Ran at Zhixin Investment Research Institute said that the Covid outbreaks in China led to huge difficulties in the production chains and the supply chains.

According to Reuters, the weak trade data adds to broader economic woes and heightens the risks of a deeper slowdown in the world’s second-largest economy.

Data released last month showed that China’s April factory activity contracted at a steeper pace due to the lockdowns.

And Chinese President Xi Jinping’s commitment to the zero-Covid strategy last week is expected to continue weighing on trade, manufacturing, and retailing sectors.

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