China’s economy has shown signs of slowing as Covid lockdowns have caused unemployment to rise and retail sales to fall.
Shanghai, which is China’s main financial hub, has been sealed off for weeks under a strict lockdown, following similar measures in the manufacturing city of Shenzhen last month.
New data indicates that draconian public health controls are beginning to weigh on China’s economy – which has been the main driver of global growth for two decades.
The economy grew at an annual rate of 4.8% in the first quarter of this year. While this is considerably faster than many Western economies have managed, it is also putting pressure on Chinese Premier Xi Xinping.
China’s Communist Party has targeted 5.5% growth for 2022 – a figure that appears to be under threat from Beijing’s continued commitment to a zero Covid policy.
Retail sales fell 3.5% in March from the same month a year ago and the International Monetary Fund has warned that a sharp rise in private sector debt is likely to slow the economic recovery.
This month’s activity is expected to “be even worse,” Julian Evans-Pritchard of Capital Economics said in a report. “China’s economic performance is expected to remain lackluster in the near term.”
ING’s Iris Pang said in a report that “further impacts from lockdowns are imminent.”
A slowdown in the world’s second-largest economy would have consequences far beyond China’s borders, especially for countries and companies that export goods such as oil and food to the country.
China is also facing reduced demand from the EU – a key buyer of its exports. Europe was hit hard by rising oil and gas prices following the Russian invasion of Ukraine.
Shanghai authorities reported on Monday that three people had died of Covid-19, the first fatalities in a new virus outbreak.
The three people who died were elderly, had underlying illnesses and had not been vaccinated against the coronavirus, the city health commission inspector said.
“After entering the hospital, their condition worsened and they died after attempts to save them failed,” Wu Ganyu told reporters.
China has recorded 4,641 deaths since Covid was first detected in Wuhan in late 2019.
About 90% of Chinese residents have been vaccinated, but the elderly have been the most reluctant to be bitten.
According to the latest data, only 62% of Shanghai residents over the age of 60 have been vaccinated.
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This notice was published: 2022-04-18 20:01:17