China’s Trade Slows as Demand Drops and Covid Lockdowns Hit Supply Chains

China’s exports rose just 3.9% from a year earlier in April, data from China’s customs bureau showed Monday, tumbling from 14.7% growth a month earlier. That was the weakest increase in nearly two years and matched a median forecast made by economists polled by The Wall Street Journal.

Imports were flat in April from a year earlier, easing from a 0.1% decline in March. That was a better performance than the 3% decline expected by the polled economists.

Compared with March, however, exports fell 0.9% in April, while imports dropped 2.7%, highlighting the pinch on trade as lockdowns reached important cities like Shanghai.

The metropolis of 25 million people has been under heavy restrictions for more than a month as authorities try to bring caseloads down. Electric-vehicle maker

Tesla Inc.

shut its factory in the city for three weeks in April, while auto-parts supplier Robert Bosch GmbH and chemicals producer

BASF SE

reported difficulties sourcing components due to trucking shortages and supplier closures.

It isn’t just Shanghai that has been affected by Beijing’s zero-tolerance approach to the virus, with dozens of cities experiencing some degree of restriction on economic activity and daily life.

Guangdong Yinrun Industry Co., which makes and sells sports bottles and toys at home and abroad, was able to keep its plants in Shantou in southern China’s Guangdong province running in April despite Covid-19 outbreaks in nearby cities like Guangzhou and Shenzhen, said Cai Yongyong, a sales manager at the company.

But output was hit by transportation delays and production suspensions at key suppliers in China’s eastern Zhejiang province, she said.

“Some goods can’t be produced because of a lack of parts,” she said.

Monday’s data adds to a string of downbeat reports on China’s economy. Surveys of managers in the services and manufacturing sectors pointed to a sharp slowdown last month.

In a survey of 121 of its members conducted in late April and early May that was published Monday, the American Chamber of Commerce in China said more than half have delayed or reduced investment in China in response to the latest Covid-19 outbreaks and 58% expect revenue this year to be weaker than forecast.

Almost 60% of those surveyed said they are still not operating at full capacity, citing staffing shortages and logistical difficulties.

Some economists say official data underplays the extent of China’s trade slowdown. Adjusting for inflation and seasonal effects, economists at consulting firm Capital Economics estimate Chinese export volumes were down 3.3% in April, while imports slipped 4.9%.

Julian Evans-Pritchard, senior China economist at Capital Economics, said in a note to clients he is doubtful exports will recover much even if virus-related restrictions ease. He said demand for consumer goods will continue to drop as consumers tilt spending back toward eating out, vacations and other services, while high inflation and rising interest rates in the U.S. and other key markets will weigh on household incomes.

On Monday, China’s central bank said it would step up support to the economy while holding off from flooding it with excessive liquidity. The People’s Bank of China said it would divert liquidity toward weaker parts of the economy as well as companies that have been hit hard by the pandemic. It also said it would carry out interest rate reforms to guide financing costs down for businesses.

Rene Ruan, a manager at New Tec Integration Xiamen Co., which sells folding chairs and tables to other parts of Asia and Europe, said she is cautious about the outlook after a spell of quick expansion after the initial pandemic shock in 2020. She said orders started to slow in April, adding that she expects sales to dip in the second half of the year as the global recovery wanes.

“It’s pretty hard to keep the fast growth forever,” Ms. Ruan said.

—Grace Zhu contributed to this article.

Write to Jason Douglas at [email protected]