The Chinese economy skidded sharply in April 2022, underscoring the extensive damage brought by the COVID-19 lockdowns that have wreaked on the country.
The country’s retail sales lowered by 11.10% year-over-year, worse than the analysts’ expected drop of 6.10%. The latest result also edged up from the previous 3.50% decline in March.
This movement marked the second straight month of falling trade and the steepest drop since March 2020. The consumption cooled amid the widespread coronavirus cases and strict restrictions in major cities, including Shanghai and Beijing.
Subsequently, sales plummeted for most commodities. For instance, jewellery decreased by 26.70%, compared to a prior drop of 17.90%.
Likewise, industrial production posted an annual decline of 2.90%, missing the market consensus of a 0.40% growth. Consequently, the data also shifted from the previous 5.00% gain, attributing to the weakness of the Chinese economy.
The figure was the first decline since 2020 as lockdown measures snarled supply chains and paralyzed distribution.
Moreover, manufacturing waned by 4.60% YoY, mainly pulled by a slump in the auto sector and equipment production.
Meanwhile, there were soft gains in the output of the utility and mining business. They slightly limit the downsides of the Chinese economy.
In addition to COVID risks, industrial production faces pressure from insufficient market demand and rising costs.
Correspondingly, analysts warned that China’s current downturn might be harder to shake off compared to the onset of the pandemic.
Consumption, jobs skid on slow Chinese economy
Furthermore, there is a 22.70% yearly drop in catering revenue, contributing to the slowing Chinese economy. This decline is amid the suspension of dining-out services in some provinces.
Auto sales also sank 47.60% from a year earlier as carmakers halted production amid empty showrooms and parts shortages. Similarly, property sales dwindled by 46.60% as the strict health restrictions chilled demand.
Eventually, experts have called for cash handouts from the government as they worry about further weakness in the Chinese economy.
The COVID shock also took a toll on the labor market. China’s jobless rate surged to 6.10% from 5.80%, the highest since February 2020.
The figure is also above the government’s 2022 target of 5.50%. Correspondingly, the segment is now the top policy priority for Beijing to maintain economic and social stability.