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China’s factory activity recovers as antivirus suppression is eased | WGN Radio 720

Beijing (AP) — China’s factory output recovered in May, joining the recovery from the latest economic downturn caused by COVID after deregulations that closed Shanghai and other industrial centers were relaxed.

According to government data, industrial production increased 0.7% compared to a year ago, recovering from a 2.9% contraction in April. Private consumption rose compared to April, but was lower than it was a year ago.

In a report, Capital Economics’ Shena Yue suggests that the data “recovery of the blockade is underway for most of the economy.”

Although the number of cases in China in the recent wave of infection is small, the ruling Communist Party’s “Zero Corona” strategy aimed at isolating everyone infected with the virus closed most of Shanghai’s businesses from late March. , Stopped access or imposed other restrictions. Other industrial cities. It fuels fears that global manufacturing and trade may be disrupted.

Most factories, shops and other businesses in Shanghai, Beijing and other cities are allowed to reopen, but it is expected that it will take weeks or months to return to normal activity.

Economists have lowered China’s growth forecast this year to 2%, well below the ruling Communist Party’s target of 5.5%. Some expect activity to shrink in the quarter ending June, before a gradual recovery begins.

Private consumption in May was down due to the turmoil in the economic outlook and the possibility of unemployment, rising 0.05% month-on-month but down 6.7% from a year ago. Investment in factories, real estate and other fixed assets increased 0.7% compared to April.

Chinese leaders have promised tax refunds, free rent, and other assistance to help businesses recover.

“We should expect the government to respond with more fiscal stimulus, following all this weak data,” ING’s Iris Pan said in a report.

Export growth reported last week accelerated from 3.7% last month to 16.9% in May. Import growth rose from 0.7% in April to 4.1%.

China’s factory activity recovers as antivirus suppression is eased | WGN Radio 720

Source link China’s factory activity recovers as antivirus suppression is eased | WGN Radio 720

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