By JOE McDONALD, AP Business Writer
BEIJING (AP)-China’s slow-moving economy has revived as anti-virus curbs have been eased and businesses in its commercial capital in Shanghai have been allowed to reopen, a Cabinet official said Monday. while data showed April factory and consumer activity was weaker than expected.
About half of Shanghai’s 9,000 largest industrial enterprises have returned to work after controls that had shut down most of the town since late March were exhausted, according to Fu Linghui, director of statistics for the National Bureau of Statistics.
The ruling Communist Party is trying to reverse the deepening slowdown without stopping “zero-COVID” tactics that are also closing sections of Beijing and other major cities to isolate every infected person. Private sector economists have cut their economic growth forecasts this year to below 2%, well below the ruling party’s target of 5.5% and last year’s 8.1% expansion.
“We believe that economic operations will gradually improve in May as logistics are unblocked to ensure smooth access and increased support for the real economy,” Fu said in a press release. conference.
The bans that keep most of Shanghai’s 25 million people from their homes have raised concerns that global production and trade could be disrupted, adding to rising inflationary pressures in the United States and Europe.
Leaders of the ruling party said after a meeting on May 5 that internal explosions would dominate the economy.
Anti-virus controls shut down factories and other businesses or suspended access to industrial centers including Changchun and Jilin in the northeast and Shenzhen and Guangzhou in the south, as well as small towns. .
Chinese leaders have promised to return taxes, short -term loans and free rent to help entrepreneurs machine the country’s economy. But repeated closures have hampered production, sales and exports. Prohibitions that keep families at home are detrimental to consumer spending.
Retail sales fell 11.1% in April from a year ago after anti-virus took control of closed shops, restaurants and other businesses of consumers in Shanghai, Beijing and other cities, it showed. in official data on Monday.
Manufacturing output fell 2.9% after factories closed and those who continued to operate with employees living in their workplaces were forced to reduce output due to disruption in supplies of components, the data showed.
That “adds to the negative risks” that China will fail to hit the growth target this year, Rajiv Biswas of S&P Global Market Intelligence said in a report.
The government had not yet gathered data in May but activity seems to be progressing judged by “indications of physical volume,” said Fu, the statistics official, who was probably referring to freight volumes and power consumption.
“I believe the second quarter will continue to have good growth momentum,” Fu said.
Shanghai, China’s richest and most populous city, will gradually reopen shopping malls, vegetable markets, hair salons and other businesses starting Monday, the government announced.
The number of people banned from leaving their homes has fallen to less than 1 million, said a deputy mayor, Zong Ming, according to the official Xinhua News Agency. Zong said on Sunday that the number of commercial outlets operating rose to 10,625 from a low of 1,400.
The Port of Shanghai, the world’s busiest, says operations are normal, but official data shows that the daily freight volume is less than 30%.
Also on Sunday, the central bank said the official lower limit on interest rates for loans taken out by first-time home buyers would be lowered. The official Global Times newspaper says the policy is designed to revive declining sales while dampening speculation that it could put politically sensitive housing costs.
“As long as the virus situation continues to improve, the economy should start to rebound this month,” Julian Evans-Pritchard of Capital Economics said in a report. “But recovery is likely to be slow.”
National Bureau of Statistics (in Chinese): www.stats.gov.cn
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