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Shanghai Industrial Output Drops for First Time in Two Years

Strict Covid lockdown measures halted production in key factories. The banking regulator says it will step up support to help restart production.


China factory
Employees wearing face masks work on a car seat assembly line at Yanfeng Adient factory in Shanghai, February 24, 2020. Japanese companies have found it tough to reopen during the Covid lockdown as they would also need to have places for workers to eat and sleep after their shifts. File photo: Aly Song, Reuters.

 

Tough Covid lockdown measures caused China’s commercial centre Shanghai to suffer a steep drop in industrial output in March for its first monthly fall in two years, local officials said on Friday.

The 7.5% year-on-year plunge stemmed from restrictions imposed on the country’s biggest city four weeks ago, which led to production being suspended at numerous factories.

“The latest virus outbreak has greatly impacted the city’s industrial activities, leading to March’s output being down 7.5% year-on-year,” Wu Jincheng, chairman of Shanghai’s economic planning agency, told a press conference.

The city’s industrial output expanded in the first quarter by 4.8% over a year earlier, Wu said, prior to the slump in March, which was the first fall since the coronavirus emerged and spread in March 2020.

The latest figures exclude the city’s smallest factories and there were no comparative data published for the fourth quarter of 2021.

Shanghai, an advanced manufacturing hub, houses factories including those of Tesla, top Chinese chipmaker Semiconductor Manufacturing International Corp and the mainland China headquarters of many international companies.

In 2021, value-added output of the city’s industrial sector hit 1 trillion yuan ($154.61 billion) for the first time and was the highest among all cities nationwide.

As Shanghai battled the latest Covid resurgence amid a lockdown, China’s Ministry of Industry and Information Technology said on April 15 it had identified 666 companies in Shanghai it would help to resume production.

The Shanghai Office of the China Banking and Insurance Regulatory Commission said on Thursday it would step up financial support to help with the resumption of production in the city of 25 million people.

 

• Reuters with additional editing by Jim Pollard

 

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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