Beijing- The Chinese Government has released data recently showing even worse economic activity in April than expected, as a result of anti-virus national lockdowns.
Concerns over manufacturing disruptions have arisen out of the economic slump currently plaguing the country. Businesses in Shanghai were forcibly closed and over 25 million residents were forced to stay home back in March, a governmental measure taken as a means of slowing the spread of the covid virus in the city.
As a result retail sales fell 11.1% while manufacturing fell 2.9%, versus 2021’s Q1. However, Chinese cabinet officials believe the economy is set to get back on track again, with positive signs of development coming out of May.
About 9000s of the city’s industrial companies are back to work, said Chief of the Statistics Bureau Fu Linghui. “We believe the operation of the economy is gradually improving,” he stated. “The pace of recovery in consumption will accelerate as the impact of the epidemic is brought under control.”
“There is still considerable uncertainty and downside risk to the near-term outlook for China if new Covid-19 outbreaks should occur in other major urban areas,” said Rajiv Biswas, an analyst at Global Market Intelligence.
The economy prior to the lockdowns was already weakening, after the government began mass crackdowns on the city’s real estate companies due to unpaid debt payments. Home construction and and sales began to fall, and the economy took a massive hit.
When it came to cases of infection the government was able to keep them steadily low during the year after shutting down their main cities. However, economic issues arose out of the lockdowns and as such the government was moved to close off only the infected areas, which has now gotten worse. Many areas across China’s cities are highly infected. Couple with the party government’s announcement on May 5th that the lockdowns will continue, it is unlikely that the economy will restabilize at any point in the coming months.
In fact, economic analysts believe the country’s economy will worsen via weaker growth in the second quarter of 2022.
However in areas of strong economic activity, such as Shanghai, the government does plan to reopen malls and businesses early next week, seeing as the number of people being held on lockdown in the city has fallen under 1 million now, according to deputy mayor Zong Ming.
China’s future economic development is in a very shaky current state, and while the economy is set to begin its slow return to pre-pandemic levels, investors and analysts are unsure.
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