On Monday morning, China’s National Bureau of Statistics released figures on China’s economic growth in April. According to them, the country’s industrial output fell by 2.9 per cent year-on-year in April. Back in March, the corresponding figure increased by five percent.
An even sharper drop was seen in retail sales, which contracted 11.1 per cent in April. Economists expected retail sales to fall by only 6.6 percent. Retail sales fell by 3.5 per cent in March. Car sales fell by 47.6 per cent in April.
China’s unemployment rate rose to 6.1 percent in April and youth unemployment to a record high. In its official unemployment figures, China only reports urban unemployment, which excludes a significant portion of the country’s labor force from the statistics.
At its meeting on Monday, the People’s Bank of China held a one-year interest rate of 2.85 percent. News agency Bloombergin According to the analysis, the decision by the People’s Bank of China to refrain from lowering interest rates despite slowing economic growth figures suggests that policymakers may be concerned about currency weakening and capital outflows.
Corona policy eats economic growth
Chinese Pinpoint Asset Managementin chief economist Zhang Zhiwei commented to news agency Bloomberg that it is possible that China ‘s economy will contract in the second quarter. In this case, it also seems less likely to reach the official 5.5% economic growth target set by the Chinese central government.
While “the government is under increasing pressure to launch new measures to stabilize the economy,” the effectiveness of any new measures depends on how the central government adjusts its zero-tolerance policy in the fight against the coronary virus, Zhang said.
At the mainland China International Trade Center in Shanghai, the curfew that has locked residents in their homes has been going on for nearly 50 days. Now the toughest closures are being phased out. According to the news agency Reuters, shopping malls and hairdressers, among others, have been able to open their doors today, Monday.
During the long lock-up, residents of the city were generally unable to leave their homes elsewhere than for mandatory corona tests. Shopping malls and restaurants have had to keep their doors closed. Similar actions have been seen in April and May across China, including in the country’s capital, Beijing.