China's economic recovery slows despite easing of Corona measures
China's economic downturn weighs on exports and raises concerns about recovery

China's economic recovery following the easing of strict Corona policies is slower than expected. The latest data show that the recovery of the second-largest economy is faltering. In May, key leading economic indicators came in worse than forecast. The manufacturing Purchasing Managers' Index (PMI) fell for the second month in a row, reaching 48.8 points, the lowest level in five months.
The weak global economy has led to slower growth in Chinese exports and a drop in imports. Non-manufacturing sectors, such as services, also lost momentum. The index for the service industry fell from 56.4 to 54.5 points. Both leading indicators fell short of experts' expectations.
There are several reasons for the cooling of the Chinese economy in the second quarter. Export growth has deteriorated, and the recovery of the battered property market is slower than hoped. The government has also curbed infrastructure spending. Companies are suffering from falling profits and rising political tensions with the U.S. and its allies.
The Chinese government is aiming for an economic rebound this year after ending its strict Corona policy. In the first quarter, growth was 4.5 percent compared to the same period last year. A growth target of "around five percent" has been set for the full year.
The latest data increases pressure on policymakers to take action to support the uneven economic recovery. The Chinese economy continues to recover unevenly after three years of pandemic stagnation. As early as April, purchasing managers' indexes and other economic indicators showed signs that the tentative recovery following the end of the Corona pandemic was faltering. Analysts Nomura and Barclays have already downgraded their forecasts for Chinese GDP growth in 2023.
