Expanding pandemic lockdowns had a significant toll on consumption, industrial output, and employment in April, raising concerns that China's economy may contract in the second quarter.
In March and April, full or partial lockdowns were enforced in dozens of cities, including a lengthy shutdown in Shanghai's commercial center, which kept workers and customers constrained to their houses and significantly disrupted supply lines.
The National Bureau of Statistics (NBS) said on Monday that retail sales in April fell 11.1%, the largest drop since March 2020 and worse than expected.
In April, certain provinces banned dining-out services, resulting in a 22.7% in catering revenue. China's auto sales fell 47.6% year on year as automakers cut production in the face of vacant displays and component shortages.
Industrial production declined 2.9% from a year ago, below estimates of 0.4%, as anti-virus efforts clogged supply chains and paralyzed distribution. The drop was the most significant since February 2020.
China produced 11% less crude oil in April than a year ago, with daily throughput dipping to its lowest level since March, in keeping with the drop in industrial capacity. Energy production in April declined 4.3% from the previous year to the lowest level since May 2020.
The shock also impacted China's job market, which is a priority for the country's policymakers in order to maintain economic and social stability. The national unemployment rate jumped to 6.1% from 5.8% in March, the highest level since February 2020, when it was 6.2%.
In April, the unemployment rate in 31 major cities reached 6.7%, the highest since records began in 2018. In 2022, the administration wants to keep the unemployment rate below 5.5%.
Premier Li Keqiang stated in March that China plans to set up more than 11 million jobs, preferably 13 million urban positions this year, but he recently described the country's employment situation as "complex and bleak" following the worst COVID-19 outbreaks since 2020.
Fixed asset investment, a key driver that Beijing is depending on to keep the economy afloat as exports falter, climbed 6.8% year on year in the first four months, compared to an expected 7.0% increase.
According to Nie Wen, a Shanghai-based economist at Hwabao Trust, the protracted regulations in Shanghai and the lengthy testing in Beijing are contributing to uncertainties about economic growth for the rest of the year.
"If pandemic limits only damage the economy in April and May, it's still conceivable to reach GDP growth of approximately 5% this year, but the virus is so contagious, and I'm worried about growth going forward."
