Strict restrictions imposed by China’s zero-COVID strategy are slowing its second-largest economy more than expected. Industrial production fell by a surprising 2.9 percent in April compared to the same period last year, the Bureau of Statistics in Beijing announced Monday. In March there was an annual increase of 5 percent.
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Retail sales fell by 11.1 percent, stronger than analysts had forecast. For this indicator, it is the second decline in a row, after the -3.5 percent in March.
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The unemployment rate rose to 6.1 percent in April. This level is close to the all-time high: – 6.2 percent in February 2020, at the height of the first corona wave.
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However, this index gives an incomplete picture of the situation: in China, unemployment is calculated only for urban residents and de facto excludes the millions of migrant workers, who are particularly vulnerable.
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Beijing has set a target to create some 11 million jobs this year, a figure lower than in 2021 (12.69 million).
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“The COVID outbreak in April had a major impact on the economy, but the consequences will be short-lived,” said Fu Linghui, spokesman for the Bureau of Statistics. The long-term fundamentals of the Chinese economy are unchanged. If the corona measures make progress and policies to stabilize the economy take effect, a gradual recovery can be expected, it said.
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