China’s Worst Economy in 30 Years; Lockdown & Zero COVID Policy Hit China’s Economy

China’s Worst Economy in 30 Years; Lockdown & Zero COVID Policy Hit China’s Economy

China’s Worst Economy in 30 Years; Lockdown & Zero COVID Policy Hit China’s Economy

China Economy Faces Worst Slowdown. China Economy Was Hit Hard by Lockdown. China in ‘deep crisis’. The economic impact of the Chinese Communist Party's "city lockdown and Zero-COVID" measures is gradually becoming more apparent. Although the GDP figures for April are not yet available, on April 30, the National Bureau of Statistics of China released key data on the manufacturing sector. The Purchasing Managers' Index (PMI) for the manufacturing sector was 47.4% in April, down another 2.1% from March; the Non-Manufacturing Business Activity Index was 41.9% in April, down 6.5% from the previous month, both the lowest since March 2020, and both below 50% for PMI readings, indicating contraction in production and the economic downturn has worsened.

China's economy grew by 4.8% in the first quarter of the year, below the 5.5% target set at the beginning of the year, and Guangdong, the country's largest GDP contributor, grew by only 3.3% year-on-year. Shanghai, China's largest economic and commercial center, reported 3.1% GDP growth in the first quarter, well below the national average. Shanghai only implemented a full scale on March 28, before which most enterprises' production was in normal conditions. But this has already caused a 7.7% year-on-year drop in GDP in March, compared to 11.9% growth in January-February.

In April, Shanghai was almost completely under lockdown. According to economic modeling by some Hong Kong academics, a one-month closure in Shanghai would result in a 54% reduction in real monthly income and a 2.5% to 3% loss in GDP for April compared to the same month in 2021.

In light of the impact of the pandemic, some international organizations and economists have lowered their forecasts for China's economic growth this year. The International Monetary Fund (IMF) lowered its forecast for China's economic growth this year from 4.8% to 4.4%; UBS lowered its original forecast of 5% to 4.2%; and Nomura Holdings’ Chief China Economist, Lu Ting, said that the impact of the pandemic on the entire Chinese economy has exceeded his personal forecast and market forecast, and cautiously gave a figure of 4.3%.