China’s manufacturing falls to 2-year low

Inside an electronic product assembly workshop in Anhui province, China, at the end of March 2022 – Photo: AFP

According to data from the National Bureau of Statistics of China (NBS) released on April 30, the purchasing managers’ index (PMI) in the manufacturing sector in April 2022 reached 47.4 points, down from 47.4 points. level of 49.5 points in March 2022.

In addition, the non-manufacturing PMI, used to measure activity in the construction and service sectors, also dropped to 41.9 points from 48.4 points in March 2022. This is the lowest level since February 2020.

The Bloomberg news agency cited a report by NBS that said the decline in manufacturing activity was due to a sharp decline in both production and demand. The recent outbreaks of COVID-19 in many parts of China have forced many businesses to reduce or stop production.

Zhao Qinghe, a senior statistician at NBS, said that up to 19 out of 21 service sectors in China, including air transport, accommodation and catering, suffered a decline due to the heavy impact of the waves. disease outbreak.

The above data comes amid an increase in the number of new COVID-19 cases in China, prompting the country’s authorities to impose a blockade measure and large-scale testing in many major cities.

Dozens of Chinese cities, including economic “pillars” such as Shenzhen and Shanghai, have been put on full or partial lockdown in recent months.

Many businesses have applied closed production measures, in which workers stay at the factory and are tested regularly, but cannot cope with prolonged anti-epidemic measures.

Logistics bottlenecks also contribute to the shortage of production materials, making it difficult to transport goods and labor domestically and abroad. Meanwhile, demand dropped as people stayed at home to avoid the epidemic.

At the meeting of the Politburo of China on April 29, the country’s leaders pledged to take measures to promote growth, but will continue to stick with the “Zero COVID” strategy. Some economists fear the strategy is the biggest risk to China’s growth this year.