China Economy Struggles as Shanghai Slowly Re-emerges

 

A return to normality for China’s economy is some time away, even as Shanghai, the epicentre of the current China Covid-19 surge, unveiled more post-lockdown plans on Thursday.

Shanghai, set to officially emerge from a lockdown on June 1, has been cautiously easing curbs, allowing more of its population to venture out and putting more cars and vehicles back on its once-busy streets.

Officials in the city said high school students can return to in-person classes from June 6, following a reopening of some shopping malls and department stores from June 1.

The city of 25 million people reported on Thursday that it had 338 new locally transmitted infections for May 25, the lowest since mid-March and a far cry from tens of thousands at the peak of its outbreak in April.

 

Stringent Measures

China’s biggest city by economic output has suffered due to the lockdown imposed in early April. Other cities not under lockdown but still hit by stringent measures, including the capital Beijing, have struggled to keep their local economies upright.

Offering a grim view of the world’s second-biggest economy, Premier Li Keqiang said economic difficulties in some aspects were even bigger than in 2020 when the country was first hit by the Covid-19 pandemic.

Many private-sector economists expect China GDP (gross domestic product) to contract in April-June from a year earlier versus the first quarter’s 4.8% growth.

China will strive to achieve “reasonable” GDP growth in the second quarter, Li told thousands of government officials across the country in an online conference.

“While there are not many new measures being announced from this conference, the nature and scale of this conference is quite unusual,” Goldman Sachs wrote in a note.

“Chinese policymakers are in greater urgency to support the economy after the very weak activity growth in April, anaemic recovery month-to-date in May, and continued increases in unemployment rates.”

 

• Reuters, with additional editing by George Russell

 

 

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