China’s manufacturing output fell to the lowest level in two years | News

These numbers come at a time when Beijing is persistently seeking a zero response to Covid leading to lockdown measures in many cities.

Today, Saturday, official data showed that manufacturing activity in China fell to its lowest level since February 2020, in the latest sign of economic pain as Beijing persistently continues its zero response to the Covid virus.

The official Purchasing Managers’ Index (PMI), a key gauge of manufacturing activity, came in at 47.4 in April – below the 50-point mark that separates growth from contraction – as authorities said the “decline in production and demand” had deepened.

The numbers come as Beijing’s policy of quickly stamping out infections through lockdowns and mass testing faces severe challenges due to the resurgence of the epidemic spurred by Omicron.

Dozens of cities, including economic powers such as Shenzhen and Shanghai, have either closed completely or partially in recent months.

The inflexible approach – even as most of the world learns to live with the virus – has done mounting economic damage, as restrictions disrupt supply chains and leave goods piling up at the world’s busiest container ports.

Zhao Qinghe, chief statistician with the National Bureau of Statistics, admitted that some companies had to reduce or stop production, while many companies reported increased transportation difficulties.

“The production and operation of … enterprises have been significantly affected,” Zhao said, according to an NBS statement which also noted that raw material price indices are still “relatively high.”

Office for National Statistics figures showed that the official non-manufacturing PMI fell to its lowest level since early 2020 as well, as the country prepares for a silent May Day holiday.

‘The situation is very worrying’

On Saturday, Chinese media group Caixin released its manufacturing PMI, showing a deterioration for the second month in a row, with the number dropping from 48.1 to 46.0.

Some view the Caixin survey, which covers small and medium-sized businesses, as a more accurate reflection of China’s economic situation than official government figures, which closely follow the state of large government groups.

“The COVID control measures have achieved a number of logistics,” said Wang Zhe, chief economist at Caixin Insight Group, in a statement.

Caixin also noted that companies have expressed concerns about how long the COVID restrictions will remain in place.

Speaking to Al Jazeera from Chagai, Dan Wang, chief economist at Hang Seng Bank, said the situation is very worrying.

“I am very concerned about where this will happen because the current lockdown in Shanghai appears to be ending after the May holiday, which means most people can probably walk around their neighborhoods, but for most factories around the east coast, they are not,” said Wang.

“Noting what is happening in Shanghai, many other cities are taking precautionary measures – even with one case of COVID an entire city could be locked down. We might be looking at a situation where 30 cities could be locked down at once. This significantly disrupts the supply chain,” she added.

On Thursday, tech giant Apple warned that shutdowns in China due to the coronavirus were among the factors that would dampen its June quarter results by $4-8 billion.

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