Inflation's stress gets pervasive

<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 inflation stress is building worldwide and will have an increasing influence on elections and the ability of governments to hold on to office.</p><p>Firstly in China, the pandemic emergency is not improving - in fact it is getting <a href="https://www.scmp.com/business/china-business/article/3173517/coronavirus-shanghais-symptomatic-cases-more-doubles-824?module=lead_hero_story&pgtype=homepage" target="_blank"><strong>worse in Shanghai</strong></a>. It is hard to know how bad it is elsewhere with a broadening clampdown on news reports. It might be concentrated only in Shanghai as it seems, but you would think the Chinese media would say so if that was the case. The risks to global supply chains are rising, not falling. The depth of their economic retreat isn't obvious. We are left seeking <a href="https://www.yicaiglobal.com/news/chief-economists-say-china-needs-to-make-moves-to-reach-55-gdp-target-in-2022" target="_blank"><strong>signals</strong></a> in <a href="https://www.cs.com.cn/xwzx/hg/202204/t20220408_6258328.html" target="_blank"><strong>oblique ways</strong></a>, like calls for 'helping hands'.</p><p>More directly, vehicle sales in China <a href="http://www.caam.org.cn/" target="_blank"><strong>fell by -11% in March</strong></a> compared to the same month a year ago. Recall in February they rose almost +19% on the same basis, so the shift down is dramatic and the first drop of the year. It has clearly been induced by sinking consumer confidence in the face of lockdown pressures.</p><p>And <a href="https://www.caixinglobal.com/2022-04-09/chinas-home-sales-plunge-47-despite-government-support-101867573.html" target="_blank"><strong>house-buying</strong></a> is in the doldrums too.</p><p>And overseas money is starting to pull out of Chinese markets. Foreign investo