People wearing face masks walk on a street during the coronavirus disease (COVID-19) pandemic in Hong Kong, China December 28, 2022. , photo credit: Reuters
China’s manufacturing activity contracted sharply in December for the third month in a row, despite official data released on Saturday Beijing eases COVID restrictions at the beginning of the month.
The Purchasing Managers’ Index (PMI) – a key gauge of manufacturing in the world’s second-largest economy – came in at 47, down from November’s 48 and below the 50-point mark that separates growth from contraction, according to data from the National Bureau of Statistics.
China was stuck on this for more than two years zero-covid strategy Ending outbreaks with strict quarantines, lockdowns and mass testing – a draconian policy that took a toll on the global economy.
On 7 December, Beijing abruptly eased pandemic restrictions, but despite that, the country is still struggling to recover Reasons for increase in Covid cases,
“Due to the impact of the epidemic and other factors… China’s economic prosperity generally declined in December,” Zhao Qinghe, senior NBS statistician, said in a statement.
“The pandemic has had a significant impact on business production and demand, employee attendance, logistics and distribution.”
The index hasn’t been in positive territory since September, and December’s figure was lower than the 47.8 reading expected by Bloomberg analysts.
However, Mr. Zhao added a touch of optimism in his statement.
“As the pandemic situation gradually improves, the market trend is expected to pick up later,” he wrote.
China’s zero-covid strategy was based on widespread testing, tight monitoring of movement and quarantine for those who test positive.
The measures, which led to undeclared plant shutdowns, disrupted supply chains and forced some companies to close permanently.
For its part, the non-manufacturing PMI—which includes the services and construction sectors—also contracted further this month to 41.6 points from 46.7 in November.
After reaching its target of over 8% in 2021, the government has set a growth target of around 5.5% this year.
But many economists now consider the 2022 target unrealistic.
China will unveil its gross domestic product (GDP) performance for the year in January.