Trade shock gut-punches weak Chinese economy

Sunday 2 October 2022

China’s latest lockdown reopening, this time around Chongqing, is going much like Shanghai before it. COVID still lurks:

Mobility is lifting:

Broader macro is OK:

Property sales popped out of lockdown but developers are still deep in the brown:

Bridges to nowhere are helping short term:

However, a generally weak economy is about to be punched in the face by an external shock that only just started:

As consumption hiccups in the US, the reverse bullship effect will take hold up the supply chain. There is much worse to come:

I expect the Chinese economy will be in recession by Q1, 2023.

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.