China lockdowns wreak havoc on economy as Xi pledges support
BNN Bloomberg
China’s stringent lockdowns to curb COVID-19 infections are taking a significant toll on the economy and roiling global supply chains, with President Xi Jinping under pressure to deliver on pledges to support growth.
China’s stringent lockdowns to curb COVID-19 infections are taking a significant toll on the economy and roiling global supply chains, with President Xi Jinping under pressure to deliver on pledges to support growth.
The damage from shutdowns in April in major financial hub Shanghai, auto manufacturing center Changchun and elsewhere was laid bare by the first official data for the month released over the weekend.
Both manufacturing and services activity plunged to their worst levels since February 2020, when the nation imposed a range of restrictions amid its initial coronavirus outbreak centered in Wuhan, according to purchasing managers surveys. The offshore yuan weakened in the wake of the data.
The strain on global supply chains is also becoming apparent, with the PMI data showing suppliers face the longest delays in more than two years in delivering raw materials to their manufacturing customers. Inventories of finished goods climbed to the highest level in more than a decade, while indexes for exports and imports slumped.
The figures came a day after the Communist Party’s Politburo, led by Xi, promised to meet its economic targets while at the same time sticking with its COVID Zero policy to curb infections. Economists see the two goals as contradictory, with many cutting their growth projections to well below the government’s official target of around 5.5 per cent.
