Our China Activity Proxy suggests that China’s economy slowed a touch in April. That was entirely driven by weaker domestic demand – China’s exports continued to rise on the back of strong global demand for chips, computer parts, autos and green tech. High oil prices have pushed factory-gate inflation up further. But price pressures remain mostly confined to certain sectors. And high oil prices have improved the profitability of some Chinese manufacturers who have benefitted from higher output prices while mitigating the impact of higher input prices by tapping inventories.
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