China’s retail sales tumbled to the lowest in over two years span, along with sliding factory output, official data showed on Monday, representing the disastrous side-effects of Beijing’s zero-Covid policy.
The second-largest economy in the world maintained strict virus measures, blocking supply lines as many Chinese cities — including the financial capital Shanghai — were put under ‘hard’ restrictions.
Officials have pledged to promote growth, slashing mortgage rates for first-time homeowners and announcing Shanghai’s phased reopening last weekend, but observers warn that the zero-Covid plan may stifle any beneficial effects.
The National Bureau of Statistics (NBS) data showed that retail sales dipped 11.1 percent year-on-year in April, the biggest downfall since March 2020 as Chinese consumers were caged at home or fearful of the prolonged restrictions.
Industrial production growth fell 2.9 percent year on year, showing the consequences of closed factories and transportation troubles as officials boosted Covid restrictions last month.
These figures show the slackened growth since early 2020 and are down 5.0 percent from growth in March.
“In April, the epidemic had a big impact on economic operations,” said the NBS in a statement, weighing on the opinion that it would be “short-term”.
The weak numbers came amid China’s ongoing battle with Covid-19. The country is facing its worst Covid outbreak since the initial days of the virus spread.
The scenario gets more disturbing with the current unemployment situation. In April, the unemployment rate spiked unexpectedly. According to NBS data, the urban unemployment rate touched 6.1 percent, the highest since early 2020.