Chinese retail and factory activity posted a steep contraction in April, dragged by the reimplementation of COVID-19 restrictions during the month.
- Retail sales for the month contracted by 11.1% year on year, reflecting the biggest decline in over two years since March 2020. This is also a sharper drop than predicted by market watchers.
- Factory production slipped by 2.9% year on year, indicating the biggest decline in over two years since February 2020 due to restrictions on supply chains and distribution. This compares with the expected growth for the month.
- Analysts believe the latest figures could hamper the country’s ability to meet its full-year economic growth target of 5.5% as it continues to implement its zero-COVID policy. Growth clocked in at 4.8% in the first three months.
Analysts expect growth at the low end of the 4.0% to 5.0% range in the next few years, with factory productivity yet to catch up.
MCHI is down 0.04%, while KWEB is up 0.30% premarket.
