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Covid locks weigh on retail, industrial production data

The continued proliferation of Covid and the resulting orders for stays at home – primarily in Shanghai – forced factories to close or operate with limited capacity in April. Pictured here on May 12 is a refrigerator factory in Hefei, China, about a five-hour drive from Shanghai.

Xie Chen | Visual China Group | Getty pictures

BEIJING ̵[ads1]1; China reported a drop in retail and industrial production in April – far worse than analysts had expected.

Retail sales fell by 11.1% in April from a year ago, more than the decline of 6.1% predicted in a Reuters poll.

Industrial production fell by 2.9% in April from a year ago, contrary to expectations of a slight increase of 0.4%.

Last month, the continued proliferation of Covid and the resulting orders to stay at home – primarily in Shanghai – forced factories to close or operate with limited capacity.

The “increasingly gloomy and complex international situs slot gacor environment and greater shock of [the] The Covid 19 pandemic at home obviously exceeded expectations, new downward pressure on the economy continued to grow, “the statistics agency said in a statement. The agency said the impact of Covid is temporary and that the economy” is expected to stabilize and recover. ”

Investments in fixed assets for the first four months of the year increased by 6.8% from the previous year, which lacked expectations of 7% growth. Investment in real estate decreased by 2.7%, while investment in industry increased by 12.2% and investment in infrastructure increased by 6.5%.

China’s passenger car production fell 41.1% year-on-year in April, according to the China Passenger Car Association. The automotive sector in China accounts for about one-sixth of jobs and about 10% of retail sales, according to official figures for 2018 compiled by the Ministry of Commerce.

Unemployment in China’s 31 largest cities climbed to a new high of 6.7% in April, according to data dating back to at least 2018.

Unemployment in cities rose by 0.3 percentage points from March to 6.1% in April. Unemployment among those aged 16 to 24 was almost three times higher at 18.2%.

For an extra sense of the extent of the economic downturn in April, other data showed a decline in corporate and household demand for loans.

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Total social funding – a broad measure of credit and liquidity – halved roughly last month from a year ago to 910.2 billion yuan ($ 134.07 billion), the People’s Bank of China said late Friday.

However, Macquarie’s chief economist Larry Hu said he expected the fall in credit demand to be short-lived. He pointed out that the central government on Sunday took its “first action … to save property” by cutting mortgage rates for first-time buyers of homes.

The interest rate, which used to follow the five-year borrowing rate as a benchmark index, is now 20 basis points below that.

“Today’s cuts are far from enough to turn around the real estate sector, but more real estate relief will come,” Hu said in a note Sunday.

Real estate and related industries account for about a quarter of China’s GDP, according to Moody’s.

This is a development story. Please check back for updates.

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