BEIJING: China's retail and factory activity fell sharply in April as wide COVID-19 lockdowns confined workers and consumers to their homes and severely disrupted supply chains, casting a long shadow over the outlook for the world's second-largest economy.
Full or partial lockdowns were imposed in major centres across the country in March and April, including the most populous city Shanghai, hitting production and consumption and heightening risks for those parts of the global economy heavily dependent on China.
Retail sales in April shrank 11.1 per cent from a year earlier, the biggest contraction since March 2020, data from the National Bureau of Statistics (NBS) showed on Monday (May 16), a steeper decline than forecast in a Reuters poll.
Factory production fell 2.9 per cent from a year earlier, dashing expectations for a rise and the largest decline since February 2020, as anti-virus measures snarled supply chains and paralysed distribution.
Analysts now warn China's current downturn may be harder to shake off than the one seen during the onset of the coronavirus pandemic in early 2020, with exports unlikely to swing higher and policymakers limited in their stimulus options.
"The upshot is that while the worst is hopefully over, we think China's economy will struggle to return to its pre-pandemic trend," Capital Economics analysts said.
The weak data sent China's blue-chip stock index into the red in a sharp reversal from morning gains and also put an end to the brief rally seen other Asian markets on Monday.
Industrial output around the Yangtze River Delta, which includes Shanghai, fell 14.1 per cent in April, while that in China's northeast shrank 16.9 per cent. Both regions saw a more than 30 per cent dive in retail sales.
In step with the unexpected industrial output decline, China processed 11 per cent less crude oil in April, with daily throughput the lowest since March 2020. In the same month, power generation fell 4.3 per cent, the lowest since May 2020.
"In April, the epidemic had a relatively big impact on the economic operation, but this impact was short-term and external," Fu Linghui, a spokesperson at China's statistics bureau, said at a press conference in Beijing on Monday.
Fu said he expects the economy to improve in May with COVID-19 outbreaks in Jilin, Shanghai and other places coming under control.
Fixed asset investment, which Beijing is counting on to prop up the economy as exports lose momentum, rose 6.8 per cent in the first four months, compared with an expected 7.0 per cent rise.
https://news.google.com/__i/rss/rd/articles/CBMiY2h0dHBzOi8vd3d3LmNoYW5uZWxuZXdzYXNpYS5jb20vYXNpYS9jaGluYXMtZWNvbm9teS1za2lkcy1sb2NrZG93bnMtaGl0LWZhY3Rvcmllcy1yZXRhaWxlcnMtMjY4NzM2NtIBAA?oc=5
2022-05-16 02:19:00Z
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