China's economy gets the staggers

<p>Kia ora,</p><p>Welcome to Monday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/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's pandemic struggles are seriously undermining their economic life and the long-term impacts seem to be getting worse.</p><p>But first, we should note that it is a long weekend holiday in the world's largest economy. But this is also an important retail shopping period when all that inventory in global supply chains has a chance of clearing. It might be the start of the northern hemisphere summer, but how consumers react with their spending decisions will be equally important.</p><p>Across the Pacific in Japan, Toyota has lowered its global production forecast for June by about 50,000 vehicles, to around 800,000, as parts shortages caused by the pandemic lockdown in Shanghai continue to disrupt them. In Japan, that will involve a five-day halt at 16 local production lines.</p><p>China <a href="http://www.stats.gov.cn/tjsj/zxfb/202205/t20220527_1857748.html" target="_blank"><strong>reported</strong></a> that its industrial companies saw profits grow +3.5% in the four months January to April. In the three months January to March they grew +8.5%. That means the April-alone result was very tough for their industrial companies. Profits at industrial companies <a href="http://www.stats.gov.cn/tjsj/sjjd/202205/t20220527_1857746.html" target="_blank"><strong>fell -8.5%</strong></a> year-on-year in April alone. High raw material prices and supply chain disruptions have significantly squeezed margins.</p><p>Their lock-down pain is spreading fast now. According to Moody's, China's property development sector and its related supply chain account for as much as 28% of the country's GDP. And the struggles and declines we have been reporting for more than a year have <a href="https://asia.nikkei.com/Business/Markets/Property/China-property-market-slump-turns-into-rout" target="_bl