Comparison is with April 2021; country faces consequences of “covid zero” policy
China’s industrial profit fell 8.5% in April, compared to the same month in 2021. The data was released this Friday (May 27, 2022) by the NBS (National Bureau of Statistics)
The April drop reverses growth of 10.6% in March. On an annual basis, industrial profit increased by 3.5% in the first 4 months of the year – but in the 1st quarter, the increase had been greater: 8.5%.
China faces the economic consequences of lockdowns in cities like Shanghai and Beijing, established to contain Covid-19 outbreaks. Zhu Hong, a senior statistician at the NBS, told the state agency Xinhua that some sectors were significantly affected by the lockdowns. Among them, the automotive sector, which pulled the 6.7% reduction in the profit of the manufacturing sector in April.
“Industrial performance will gradually recover as the omicron outbreak stabilizes“, said. “Factories and businesses are resuming production in an orderly fashion and measures to ease the burden on businesses are having an effect.“, said.
“We will work hard to unlock bottlenecks in industrial and supply chains, help companies overcome difficulties and create more favorable conditions for the continued recovery of industry business performance.”
CHALLENGES
China’s Premier Li Keqiang said the country’s economy faces “dark challenges”. According to the newspaper The Washington Postthe statement was made at an emergency meeting on Wednesday (May 25).
The prime minister held a videoconference with representatives of local governments. He urged leaders to help stabilize the Chinese economy so there is no contraction in Q2.
Li cited that several international organizations have revised downwards expectations for China’s growth. “we can’t accept this“, said.
According to him, the Chinese economy has been facing bigger problems than in 2020, the beginning of the pandemic. The prime minister spoke about the worsening in indices such as employment, industrial production and energy generation.
The CCP (Communist Party of China) and the country’s president, Xi Jinping, have adopted a policy of “covid zero” during the pandemic. As a result, the country lockdowns as soon as the first cases of covid-19 are confirmed.
China experienced its peak of covid cases in April, when it recorded an average of 21.2 infections per million inhabitants. Residents of major cities such as Shanghai and the capital Beijing were forced to stay indoors. In some provinces, even places that provide essential services, such as supermarkets, have been closed.
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