Strict restrictions imposed by China’s COVID-free strategy are slowing down the second largest economy more than expected. The Beijing Statistics Bureau announced Monday that industrial production fell by a surprising 2.9 percent in April compared to the same period last year. In March there was an annual increase of 5 percent.
Retail sales fell 11.1 percent, stronger than analysts had expected. For this indicator, this is the second consecutive decline, after -3.5 percent in March.
The unemployment rate rose to 6.1 percent in April. This level is close to an all-time high: – 6.2 percent in February 2020, at the height of the first corona wave.
However, this indicator gives an incomplete picture of the situation: in China, unemployment is calculated only for urban residents and de facto excludes millions of migrant workers, who are especially vulnerable.
Beijing has set a target to create about 11 million jobs this year, a figure lower than in 2021 (12.69 million).
“The Covid outbreak in April had a significant impact on the economy, but the consequences will be short-lived,” said Fu Lingwei, a spokesman for the Statistics Office. The fundamentals of the Chinese economy in the long run have not changed. She said that if the Corona measures made progress, and the stabilization policies in the economy went into effect, a gradual recovery could be expected.
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