Iran war begins to hit China’s economy as costs surge

Key Points:

• The war in Iran is impacting China's economy by causing a surge in oil and natural gas prices, leading to a 26% drop in car sales and factory shutdowns, particularly in the toy industry.
• China's automotive sector is notably affected, with a 27% decrease in car production in early April and a near 40% decline in gasoline-powered vehicle sales, signaling broader economic slowdowns.
• Despite China's strategic energy reserves and measures to shield consumers from full price hikes, rising energy costs and disrupted supply chains are straining private consumption and exports.
• Thousands of workers protested factory closures in Yulin, southern China, after Wah Shing Toys shut down due to increased plastic prices, trade tensions with the US, and unpaid foreign debts, highlighting challenges in manufacturing sectors.
• Economic experts warn that China may struggle to meet its 4.5% growth target amid these pressures, although some industrial profits remain strong due to windfalls in chemical and energy companies.