China's lockdown is weighing on global economy

China’s lockdowns to contain Covid have snarled operations at the world’s largest port in Shanghai and stalled activity in major cities, affecting the supply chains of businesses from Tesla Inc. to Apple Inc.

Shanghai authorities were tightening the city-wide COVID lockdown they imposed more than a month ago, prolonging into late May an ordeal that China's capital Beijing was desperate to avoid by turning mass testing into an almost daily routine.

Chinese export growth likely slowed to its weakest pace since June 2020, while imports probably contracted for a second month, a sign of weak consumer spending as millions of residents in Shanghai and elsewhere were confined to their homes.

As manufacturer to the world, the disruptions in China are weighing on the global economy and add another risk to the inflation picture. In Shanghai, where most of the population have been under some form of lockdown for more than five weeks, the government is trying to get production back on track. Yet many foreign businesses say they’re still unable to resume operations.

Early indicators for trade aren’t promising. South Korean exports, a barometer of worldwide demand, grew by double digits in April, yet shipments to China dropped, suggesting China’s slowdown is a product of its own Covid restrictions.