As China is at peak of the COVID-19 pandemic, the country’s manufacturing and services sectors have witnessed a downfall in the month of March, an official survey showed on Thursday.
The official manufacturing Purchasing Managers’ Index (PMI) fell to 49.5 from 50.2 in February, the National Bureau of Statistics (NBS) said, while the non-manufacturing PMI eased to 48.4 from 51.6 in February, according to Xinhua News Agency.
A reading above 50 indicates expansion, while a reading below reflects contraction.
The last time both PMI indexes simultaneously were below the 50-point mark that separates contraction from growth was in February 2020, when China was facing the initial outbreak of the new coronavirus.
The world’s second-largest economy revved up in the first two months of 2022, with some key indicators blowing past expectations. But it is now at risk of slowing sharply as authorities restrict production and mobility in many cities, including Shanghai and Shenzhen, to stamp out a rash of COVID outbreaks.
Amid the rapidly increasing COVID-19 cases, the Chinese authorities have imposed the strictest lockdown measures in the city of 26 million since the beginning of the pandemic in 2020, a media report said.
The city which is one of the important financial hubs of the country has been placed under lockdown as a result of China’s ‘zero-covid’ strategy, Vision Times said.
Meanwhile, Chinese analysts had expressed hope for economic growth in the country even as China faces increased uncertainties in the wake of the Ukraine-Russia conflict, increased oil prices, and continued tensions with the west, according to media report.
Chinese Premier Li Keqiang at the conclusion of the fifth session of the 13th National People’s Congress, the highest legislative body of China had laid out the economic growth target of China in the forthcoming year and briefed the media on the challenges of achieving the desired growth rate.
“A growth rate of about 5.5 per cent is high-standard stability, which is an improvement. It’s not easy to achieve, and has to be supported by relevant macro-economic policies,” Li said.
“It shows Li’s confidence that disruption of unstable factors on China’s economy will be relatively small, although he also expressed a certain level of caution,” Bo Wenxi, chief economist at wealth management firm IPG China was quoted by Global Times.
Li also said that China needs new job platforms and that the government will give support, like providing training services to new labourers.
The comment is important given China’s shrinking job market has raised concerns in recent years. A recent survey conducted by the China Institute for Employment Research (CIER) at the Renmin University of China and job search website Zhaopin indicate that the number of jobs available per applicant among fresh university graduates in China fell to 0.88 in the fourth quarter of 2021, reported The Hong Kong Post.
A major economic uncertainty that China faces is the increased global oil prices and the continued conflict in Ukraine and the accompanying sanctions against Russia.