China struggles to retain its economic momentum

<p>australiuaKia ora,</p><p>Welcome to Monday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news China is struggling to recapture that feeling things are on the improve still.</p><p>Firstly in the Middle Kingdom, anxiety is rising as the delta variant of the pandemic is now a risk in half the country's provinces. It is not clear that the tough measures in some are actually stemming its spread but they probably are limiting it. And later today we will get Chinese CPI data for July and that is expected to be very low for consumers and remain very high for manufacturers.</p><p>But we already have new data for China <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/3807908/index.html" target="_blank"><strong>exports</strong></a> and that disappointed in July with a flat result from June and a year-on-year increase much less than expected. Compared with pre-pandemic July 2019 however, China's July 2021 exports are up +32%.</p><p>China <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/3807908/index.html" target="_blank"><strong>imports</strong></a> were actually lower than the prior month. But compared to July 2019 they are +31% higher. However it is the recent tailing off that is grabbing the quizzical looks, reinforcing the thought that China's expansion is losing some momentum.</p><p>Global <a href="https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry" target="_blank"><strong>shipping container rates</strong></a> rose again last week, even if only marginally. But it is a massive +370% rise in these rates in a year. Some routes like Los Angeles to Shanghai are still rising sharply, up +5% last week alone, but the route the other way - outbound from China - actually fell -3% last week. Industry insiders however think the rise will keep coming, even if at a