Chinese economy slows sharply in April as Covid-19 restrictions bite
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12:40 24/12/24
China's economy slowed much more sharply than anticipated last month as Covid-19 mobility restrictions hampered growth, piling the pressure on policymakers in Beijing - right up to the top according to some accounts.
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According to the country's National Bureau of Statistics, industrial output flipped into the red with the annual rate of growth in output falling by 2.9% (consensus: 5.0%), following a rise of 5.0% in March.
Factory output was the chief drag, according to Craig Botham at Pantheon Macroeconomics, with automobile production plummeting at a year-on-year pace of 31.8% after a decline of just 1.0% during the month before.
Similarly, the contraction in retail sales accelerated from a 3.5% year-on-year pace in March (consensus: -6.6%) to -11.1% for April.
In particular, Botham noted that the weakness in retail sales was much more broad-based than in March, as only medicine and fuel sales registered increases.
Fixed asset investment growth slowed alongside, although it was nearer the mark.
Year-to-date, investment was up by 6.8% last month (consensus: 7.0%), versus 9.3% in March.
"The world’s workshop essentially closed down in April, which must have consequences for global supply chains before too long," said Botham.
Worth noting perhaps, mobility restrictions in China were such that during the previous week CNBC reported on increasing social media chatter regarding pressure on Chinese President Xi Jinping to step down.
Dewardric Mc.Neal at Longview Global said that the anger among citizens - especially in Shanghai - was "real" and the discontent "deep".
Even some rank and file Communist Party members were said to be upset.
However, Mc.Neal poured cold water on the speculation, saying that there were no signs that the elite members of the CCP were looking to replace him and any step down would not come before the next party congress due to be held in the fall.
In any case, Xi stepping down from General Secretary of the Party or from his post as the chairman of the Central Military Commission was completely out of the question, the analyst added.
Push back against some of his policies on the other hand was a possibility and might result in policy loosening towards the technology and real estate sectors.