The figures come as Beijing persistently pursues a zero response to Covid, leading to blockades in several cities.
Production activity in China fell to its lowest level since February 2020, official data on Saturday showed, the latest sign of economic pain, while Beijing is persistently pursuing its zero response to Covid.
The official Purchasing Managers’ Index (PMI), a key indicator of manufacturing activity, reached 47.4 in April – below the 50-point mark separating growth from contraction – as authorities said the “decline in production and demand” has deepened. .
The figures come as Beijing’s policy of rapidly eliminating infections through blocking and mass testing has been severely challenged by the revival of the Omicron-led pandemic.
Dozens of cities, including economic centers such as Shenzhen and Shanghai, have been completely or partially closed in recent months.
The inflexible approach – even as most of the world learns to live with the virus – has caused growing economic pain, with curbs snorting supply chains and leaving goods piled up in the world’s busiest container port.
Zhao Qinghe, a senior statistician with the National Bureau of Statistics (NBS), acknowledged that some companies had to reduce or stop production, while many companies reported increasing transportation difficulties.
“The production and operation of … enterprises are severely affected,” Zhao said, according to a statement from the NBS, which also noted that commodity price indices remained “relatively high.”
The official PMI in the non-manufacturing sector has also fallen to its lowest level since early 2020, according to NBS data, as the country prepares for a muted Labor Day holiday.
“The situation is very worrying”
On Saturday, the Chinese media group Caixin released its own index of purchase purchase managers, showing a second consecutive month of deterioration, falling from 48.1 to 46.0.
The Caixin survey, which covers small and medium-sized enterprises, is seen by some as a more accurate reflection of China’s economic situation than official government data, which traces the state of large state groups more closely.
“COVID-19 control measures have contributed a lot to logistics,” said Wang Je, a senior economist at Caixin Insight Group.
Caixin also noted that companies have expressed concern about how long COVID’s restrictions will remain in place.
Speaking to Al Jazeera in Shahai, Dan Wang, chief economist at Hang Seng Bank, said the situation was very worrying.
“I’m very worried about where this is going, because the current blockade in Shanghai looked like it would end after this May holiday, which means that most people can probably walk around their neighborhoods, but for most factories on the East Coast they are not in “Very good condition,” Wang said.
“Noting what is happening in Shanghai, many other cities are taking precautions – even with one COVID case, an entire city could be closed. We can consider a situation in which 30 cities can be blocked at the same time. This is extremely destructive for the supply chain, “she added.
On Thursday, technology giant Apple warned that blocking COVID in China was among the factors that would reduce its results for the quarter in June by 4-8 billion dollars.
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