Big challenge

China ended anti-virus controls in December, but their growth is in low gear as managers struggle to rebuild business lost during the pandemic. China’s economy rebounded at the start of 2023, but after a good first quarter, factory output and consumer spending are weakening. An official survey in April found a record 1 in 5 young workers in citiesGrowth would need to pick up further to reach the ruling Communist Party’s target of “around 5%” for the year. The end of restrictions that isolated cities for weeks at a time and blocked most international travel prompted hopes for a consumer boom. But retail sales are weak. Shoppers are uneasy about the economic outlook and possible job losses and are reluctant to commit to big purchases.Retail sales in April surged 18.4% over last year’s lackluster level, but that was barely half the growth of up to 35% called for by private sector forecasts. Factory output fell 0.5% compared with March and investment growth slowed. Exports in May tumbled 7.5% from a year ago after global consumer demand was depressed by interest rate hikes by the Federal Reserve and central banks in Europe and Asia to cool inflation. Exports to the United States plunged 18.2%. That is a challenge for automakers and other manufacturers that are trying to make up for weak demand at home by selling more abroad.