Unemployment in China peaked since May 2020. Retail sales fell. Millions of people are confined to their homes due to a “zero tolerance” strategy designed to contain the epidemic.
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The situation in the Middle Kingdom looks more favorable in terms of GDP growth. The Chinese economy grew stronger than economists had predicted. And this despite the fact that the sharp increase in the number of coronavir infections has forced local authorities to introduce lockdowns in several large cities, including Shanghai, which is the financial, manufacturing and shipping center of the Middle Kingdom.
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Gross Domestic Product (GDP) increased by 4.8% in the first quarter. Every year. Although the data positively surprised analysts, the economy continued to grow below the target of 5.5% growth.
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Coronavirus in China. The zero tolerance policy affects the economy
Retail sales data were much worse. This in March fell by 3.5 percent. on an annual basis. This is the first decline in this indicator since July 2020. In the same period, unemployment increased to 5.8%, which is the highest level since May 2020.
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The latest data indicate a risk of a sharp slowdown in the second world economy. The Middle Kingdom will also not remain immune to the economic turmoil resulting from the Russian invasion of Ukraine.
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On Friday, China’s Ministry of Industry and Information Technology said it would help resume operations of more than 600 companies in Shanghai. These are companies from the technology, automotive and medical industries. Some factories, including the Pegatron plant, a major iPhone manufacturer, have stopped all operations in Shanghai.
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Hueawei director Richard Yu warned last week that supply chains in the technology, industrial and automotive sectors would “be cut completely” if Shanghai did not lift restrictions next month.
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Most of Shanghai’s 25 million inhabitants have been at home for the third week as China continues to employ a “zero tolerance” strategy to contain the epidemic, demanding that anyone who may be infected be isolated.
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China said on Monday that 23,362 people had tested positive for the virus in the last 24 hours, with most showing no symptoms and nearly all of them living in Shanghai.
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photo-source">Main photo source: PAP/EPA/MARK R. CRISTINO
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