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Buzz Update China’s economy accelerates in Q1, but virus outlook TOU

Buzz Update China’s economy accelerates in Q1, but virus outlook

 TOU

China’s economy accelerates in Q1, but virus outlook

China’s economic growth accelerated to 4.8 percent in the first quarter of the year, official data showed Monday, but the government has warned of “significant challenges” as the massive Kovid-19 lockdowns begin to bite.

The world’s second-largest economy slowed growth in the last half of last year with property depreciation and regulatory crackdowns.

However it exceeded expectations in the first three months of 2022, growing by 4.8 per cent year-on-year, according to the National Bureau of Statistics (NBS).

Read also | China: The first COVID-19 deaths were reported in Shanghai after the lockdown began

The coming weeks will be seen as a betrayal of the economy with Beijing’s relentless zero-Kovil policy of disrupting supply chains and locking tens of millions of people, including the Northeast grain basket, along with economic dynamos in Shanghai and Shenzhen. Jillin.

Viral sanctions in March had already boosted retail sales as consumers shunned shopping and increased unemployment.

“As the domestic and international climate becomes more critical and uncertain, economic growth is facing significant difficulties and challenges,” NBS spokesman Fu Lingui said Monday.

The pandemic recovery – as well as sanctions binding the Russian economy – are a foregone conclusion on the part of Beijing’s authorities to meet Beijing’s full-year growth target of 5.5 percent.

The goal comes in a crucial political year for President Xi Jinping, who is looking to return to power at the party congress this fall.

Watch | China’s Zero-Kovid Policy Affects the Economy, Analysts Expect Lowest GDP in Decades

The current virus outbreak has been so bad since the peak of the first wave that emerged in Wuhan‌ at the end of 2019 and the economy has started to weaken.

Industrial output growth slowed to 5.0 percent in March, according to NBS data for the January-February period.

Meanwhile, retail sales fell 3.5 percent and the urban unemployment rate hit a 22-month high of 5.8 percent last month.

“March activity data indicates that China’s economy has slowed, especially in domestic consumption,” said Tommy Wu, chief Chinese economist at Oxford Economics.

Comes worse

Wu said the Chinese government was trying to balance the “interruption in controlling the latest wave of Kovid infections”, but he warned of pulling economic activity in May or beyond.

Last week, carmakers, including XPeng and Volkswagen, warned that if the lockdown continues on Shanghai’s 25 million residents, there could be severe disruptions to supply chains and a complete shutdown of production.

Already, goods are piling up in the world’s busiest container port in Shanghai, prompting shipping giant Mars to say it will stop taking new bookings for refrigerated containers into the city.

Read also | Japan has scrambled jets 1,000 times between Chinese and Russian air operations

“More impacts from lockdowns are imminent,” said Iris Pong, Greater China’s chief economist at the IG.

While Shanghai, which has seen tens of thousands of cases daily, is struggling to control the spread, Pang said other cities could try to reflect Shenzhen’s success in reopening faster by resorting to harsh measures with some Kovid patients.

Southern Tech Powerhouse went into complete lockdown for almost a week in March, but has since relaxed restrictions.

Julian Evans-Pritchard of Capital Economics warns that “the worst is yet to come.”

The NBS ‘Fu warned on Monday that higher commodity prices could lead to a decline in the availability of commodities such as corn and wheat following the Russia-Ukraine conflict.

Read also | China has begun sending the most sophisticated fighter jets to patrol disputed seas

Despite China’s central bank announcing a Reserve Ratio cut, the reduction in the amount of cash banks should be enough to support small businesses, experts say, taking a controlled approach to stimulus.

But as part of doubts that the numbers will be massaged for political reasons, economists expect officials to eventually publish the growth number in line with official targets.

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