China’s industrial companies reported their worst fall in profits in two years in April, a sign of the economic and corporate pain emerging from the new wave of COVID-19 lockdowns.
- Industrial profits decreased 8.5% in April compared with the same period a year ago, the measure’s worst decline since March 2020.
- The contraction intensifies pressure on the government, which has emphasized maintaining its zero-Covid policies that target to eliminate infections through mass testing, lockdowns, and quarantine.
- The zero-Covid policy is a priority for President Xi Jinping this year, but mounting economic costs pose a huge threat to the nation’s growth target of 5.5% for 2022.
Lockdowns are projected to have affected numerous cities and hundreds of millions of people. Restrictions are also imposed in Beijing, which is posting dozens of daily COVID cases.
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