China's economic activity cooled sharply in April as widening COVID-19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter.
Full or partial lockdowns were imposed in dozens of cities in March and April, including a protracted shutdown in commercial centre Shanghai, keeping workers and shoppers confined to their homes and severely disrupting supply chains.
Retail sales in April shrank 11.1% from a year earlier, the biggest contraction since March 2020, data from the National Bureau of Statistics (NBS) showed on Monday, and worse than forecast.
Dining-out services were suspended in some provinces, which led to a 22.7% drop in catering revenue in April. China's auto sales plunged 47.6% from a year earlier as car makers slashed production amid empty showrooms and parts shortages.
As the anti-virus measures snarled supply chains and paralysed distribution, industrial production fell 2.9% from a year earlier, below expectations for 0.4% growth. The reading was the largest decline since February 2020.
In line with the decline in industrial output, China processed 11% less crude oil in April than a year earlier, with daily throughput falling to the lowest since March. The country's April power generation also fell 4.3% from the previous year, the lowest since May 2020.
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The shock also weighed on the job market, which Chinese leaders have prioritised for economic and social stability. The nationwide survey-based jobless rate rose to 6.1% in April from 5.8%, the highest since February 2020 when it stood at 6.2%.
The 6.7% jobless rate in 31 major cities in April is the highest since records started in 2018.
China wants to create more than 11 million jobs, and preferably 13 million urban jobs this year, Premier Li Keqiang said in March, but he recently called the country's employment situation "complicated and grim" following the worst COVID-19 outbreaks since 2020.
Fixed asset investment, a main driver that Beijing is counting on to prop up the economy as exports lost momentum, increased 6.8% year-on-year in the first four months, compared with an expected 7.0% rise.
The extended lockdown in Shanghai and prolonged testing in Beijing are adding to the concerns about economic growth over the rest of the year, said Nie Wen, Shanghai-based economist at Hwabao Trust.
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"It's still possible to achieve a GDP growth of around 5% this year if COVID curbs are only going to affect the economy in April and May. But the virus is so infectious, and I remain concerned about growth going forward." Source: Nasdaq...
