China’s mixed economic performance continues amid COVID-19 resurgence

China will release a raft of data in the week ahead that will likely reflect continued headwinds to the Chinese economy – with some silver linings. One such silver lining could be on the trade front. China’s trade balance for the month of March is likely to have continued to expand after reaching record highs. And yet, of particular interest will be the degree to which the expansion of the surplus reflects weakness in import demand (a potential sign of softer consumer spending in China). Inflation measures – such as consumer prices and producer prices for March – are also likely to show continued upside pressure. Property price developments are unlikely to give cause for optimism; this week’s house price report will show a continued annual deceleration in March. The resurgence of the COVID-19 Omicron variant will be a downside risk to economic growth in the middle months of this year. Shutdowns in major cities are likely to impact both the ‘hard’ activity data, and consumer and business confidence data that shed light on economic and policy developments to come.