An official survey showed today, Thursday, decline Activity in the manufacturing and service sectors in China Simultaneously for the first time since the peak of the coronavirus outbreak in the country in 2020.
The National Bureau of Statistics said the official manufacturing purchasing managers’ index fell to 49.5 points from 50.2 points in February, while the non-manufacturing purchasing managers’ index fell to 48.4 points from 51.6 points last month.
The last time the “PMI” index was below the 50-point level separating contraction from growth was in February 2020, when China was struggling with the initial outbreak of the Corona virus, according to “Reuters” and seen by “Al Arabiya.net”.
This comes as the world’s second largest economy rebounded in the first two months of 2022, with some key indicators that beat previous expectations, but are at risk of a sharp slowdown with authorities restricting production and movement in many cities, including Shanghai and Shenzhen, to eliminate Corona virus hotspots.
The chief statistician of the Chinese National Bureau of Statistics, Zhao Qing, attributed the reason behind the recent slowdown to the outbreak of the Corona virus in many Chinese cities, which was accompanied by a significant increase in global geopolitical instability, and the production and operation of Chinese companies was affected.
Drops below the 50-point threshold clearly show that the overall level of Chinas economic activity has declined, Zhao said in a statement accompanying the data release.
The shutdown of Shanghai due to the Corona virus has disrupted car production in recent days as two major suppliers joined Tesla in closing factories to comply with measures to control the spread of the virus.
In turn, the chief economist at Pinpoint Asset Management, Zhuyi Zhang, expected a further slowdown in economic activities in April, especially since the closing of Shanghai did not occur until late March, which means that the impact was limited to the figures for the last month in the first quarter. .
For his part, Chinese Prime Minister Li Keqiang lowered the economic growth target to 5.5% this year, which some analysts considered ambitious, given the stagnation in the real estate market, weak consumption and the outbreak of the Corona virus.
To mitigate the impact of the new coronavirus-related closures, authorities have unveiled steps to support businesses, including rent waivers for some small service sector firms.
Analysts expected the central bank – which kept the benchmark interest rate on corporate and household lending unchanged in March – to cut interest rates and reserve requirements for banks as downward economic pressures build.
Chinas official composite PMI, which combines manufacturing and services, settled at 48.8 points in March, compared to 51.2 points in February.