China’s status as the workshop of the world is coming under pressure, with clear signs that foreign trade is shrinking as other countries look to diversify their supply chains and reduce dependence on Chinese goods. Two recent headlines highlight the issue. The first was about China losing a growing share of U.S. imports to lower-cost Asian rivals, and the second reported how Beijing is mapping out a plan to boost foreign trade after six months of weak exports.

One of China’s most deprived provinces, Guizhou, is reportedly close to insolvency and may need a sizeable government bailout. Other provinces are also facing similar problems, having overextended themselves to prop up their local economies during the pandemic.

Offshore listed China stocks have remained relatively flat, with the Hang Seng China Enterprises Index and the Hang Seng Index dropping by 0.9% and the iShares MSCI China ETF by 0.6%. Although the latest company results are generally upbeat, investors await more information before determining whether the first-quarter rebound is sustainable.

In tech news, China’s metaverse has gone from “flavor of the day” two years ago to “nowhere to be found” more recently, with two of China’s biggest tech names, Tencent and ByteDance, recently gutting their metaverse divisions due to weak demand and lack of direction. In the U.S., Republican senators want the Biden administration to impose sanctions on Chinese cloud service providers at a time when big state-owned telcos are growing their cloud presence.

China’s smartphone sales were also on the slide in the first three months of the year, dropping 12% overall, with Xiaomi sales falling 22.9%, and low-end smartphone brand Honor, dropping 22.8%. Analysts blame cautious consumer sentiment for the weak sales.

On a positive note, British Airways has resumed flights to China after suspending services for over two years during the Covid restrictions. The airline will fly daily between Shanghai and London, with services to Beijing set to resume in June. However, airfares remain high, dampening international travel as the country slowly reopens to the outside world.

Lastly, Evergrande has extended the deadline for its creditors to accept a restructuring deal until May 18 as the company tries to survive and repay its $300 billion in debt, some of which is already in default. Many creditors may be balking at the new proposals, worried the company may go under before they can collect repayments, some scheduled for years from now.