The bad news is that China’s leaders are having a hard time keeping COVID outbreaks from happening while also dealing with rising prices, rising interest rates, and a global slump.

On Monday, official statistics revealed that outbound exports fell 0.3% from a year earlier, reversing September’s 5.7% growth and falling below analysts’ estimates for a 4.3% rise. Worst performance since May 2020.

The report implies demand is weak, and analysts predict more gloom for exporters in the coming quarters, putting extra pressure on the country’s industrial sector and the world’s second-largest economy, which is struggling with COVID-19 curbs and property slump.

Chinese exporters weren’t even able to capitalise on a prolonged yuan currency depreciation since April and the important year-end shopping season, highlighting global consumer and corporate concerns.

After dismal trade statistics and Beijing’s pledge to stick to its zero-COVID plan, the yuan fell from a more than one-week high versus the dollar on Monday.

“The sluggish export growth likely reflects both poor external demand and the supply disruptions due to COVID outbreaks,” said Pinpoint Asset Management chief economist Zhiwei Zhang, citing COVID breakouts at Foxconn, an Apple supplier.

After a major production drop at the virus-plagued Zhengzhou facility, Apple Inc. (AAPL.O) predicts lower-than-expected iPhone 14 shipments.

“We expect exports to fall further in the next quarters… Next year’s global recession will be caused by aggressive banking tightening and high inflation’s pressure on real earnings “capital economics economist Zichun Huang.

According to Reuters calculations based on customs data, vehicle export volume growth slowed to 60% from 106% in September, showing a shift from products to services in major nations.

Domestic issues hinder growth. China’s COVID-19 containment policy has cost the economy and frustrated and exhausted people for almost three years.

After a strong third quarter, October industrial and trade numbers showed the economy is still struggling in the fourth quarter of 2022.

The Ukraine war, boosted global inflation, increased geopolitical tensions, and slowed commercial activity.

Last week, Chinese policymakers committed to prioritising economic growth and reforms, soothing concerns that ideology could take precedence as President Xi Jinping began a new leadership term and disruptive lockdowns persisted with no apparent exit path.

Importers were hit by weak domestic demand and October COVID-19 restrictions.

Inbound shipments fell 0.7% after a 0.3% gain in September, below an expected 0.1% increase, the lowest result since August 2020.

Chinese imports of soybeans, copper, and coal showed the devastating impact of strict economic measures and a property downturn on demand.

Analysts think weak domestic demand and the global slump will continue to burden China’s economy.

“Insufficient domestic demand is the fundamental restriction on China’s short-term recovery and long-term economic trajectory,” said Jones Lang Lasalle chief economist Bruce Pang.

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