Chinese Stocks, Yuan Fall as Lockdowns Hit Retail Sales, Industrial Output
2022.05.16 09:56
By Geoffrey Smith
Investing.com — Three key pieces of Chinese economic data all fell short of expectations in April, underlining the damage done by the extended lockdowns plaguing Shanghai and other big population centers to stamp out COVID-19.
Retail sales fell 11.1% on the year in April, well below the 6.5% drop expected, and are now down 0.2% year-on-year over the first four months of the year.
The country’s factories fared little better, despite all the efforts to keep them open by creating ‘bubble’ environments for workers to live in, frequently requiring them to sleep at their workplace. Industrial production fell 2.9% on the year, compared to expectations that growth would only slow to 0.4%. Growth in fixed-asset investment did stay positive, at least, but slowed to 6.8% from 9.3%.
Chinese assets took the news badly, with the Shanghai Shenzhen CSI 300 index falling 0.9% by 2:30 AM ET (0630 GMT), and the offshore yuan falling 0.2% to 6.8082. The dollar has risen by some 8% against the yuan in the three months since the Omicron variant of COVID-19 forced China to implement its first major lockdowns since the early stages of the pandemic in 2020.
Shanghai, which has spent two months under varying degrees of lockdown, aims to start lifting restrictions and return to a more normal way of life from the weekend, Reuters quoted deputy mayor Zong Ming as saying on Monday. She said that the easing of restrictive measures would be gradual.
She said the city, which has shown falling numbers of new cases for over two weeks, would begin to re-open supermarkets, convenience stores, and pharmacies from Monday, but added that many movement restrictions had to remain in place until at least May 21.
Data showed that Shanghai had fewer than 1,000 new cases on Sunday.
The city has had numerous false dawns already, the virus being harder to eradicate than the more virulent but less transmissible original version that wrought havoc in Wuhan in 2020.
The Chinese capital Beijing remains on high alert, however, as reported new infections rose to 54 from 41 on Sunday.
