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China’s retail sales slumped to its lowest in two years while factory output plunged, official data showed Monday, capturing the dismal economic fallout from Beijing’s zero-Covid policy. News Online

The world’s second-largest economy has persisted with strict virus measures, choking up global supply chains as dozens of Chinese cities — including key business hub Shanghai — grapple with restrictions.

Officials have vowed to support growth, lowering the mortgage rate for first-time homebuyers. While Shanghai’s gradual reopening was announced over the weekend, observers warn that the zero-Covid strategy could mute any positive impact.

The latest cut came Monday when the National Bureau of Statistics (NBS) announced data showing that retail sales shrank 11.1 percent on-year in April.

It is the biggest slump since March 2020 as Chinese consumers remained cooped up at home or jittery over lingering restrictions.

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“In April, the epidemic had a big impact on economic operations,” NBS spokesman Fu Linghui told reporters Monday, adding that the outbreak had a “significantly larger-than-expected” effect.

But he stressed that the hit would be “short-term” and a gradual recovery was on the cards.

Industrial production growth also sank 2.9 percent on-year, reflecting damage from shuttered factories and transportation woes as officials ramped up Covid restrictions last month.

This figure is the weakest since early 2020, and down from 5.0 percent growth in March.

The dismal showing came as China battles its worst Covid outbreak since the early days of the pandemic.

“The prolonged Shanghai lockdown and its ripple effect through China, as well as logistics delays resulting from highway controls… have severely affected domestic supply chains,” said Tommy Wu, lead China economist at Oxford Economics.

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He added that household consumption was “hit even harder” and disruption to activity could extend into June with a rebound likely to take weeks.

• Unemployment rise –

In April, unemployment similarly rose to levels not seen since early 2020, according to the data, as the urban unemployment rate hit 6.1 percent.

In a sign of looming concern among authorities, China on Friday announced measures to help young people find jobs — given that a record number of fresh graduates are expected to enter the market this year.

These include social insurance subsidies for smaller firms that hire more graduates.

State-owned enterprises are also expected to boost recruitment, official Xinhua news agency said.

“Repeated indications from the authorities that meaningful policy easing is on the horizon have not played out,” said financial services firm Gavekal in a recent note, adding that policymakers may be waiting for lockdowns to lift before boosting stimulus.

“Yet as Shanghai and Beijing struggle to reopen and the economic damage keeps growing… officials may yet be forced to crank up stimulus sooner,” Gavekal said.

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Notes from APS Radio News

Although the virus has been portrayed as the proximate and direct cause of disruptions in various goods and services as well as that of higher rates of inflation, a number of observers and analysts say that the proximate cause has been that of lockdowns and quarantines.

Concerning the virus itself, according to Statista, an award-winning service that compiles and analyzes various types of data for corporations and governments, in the US, the average mortality rate has been about .07%.

In previous years when the seasonal flu was recorded in terms of number of cases, the mortality rate could be as high as .13%.

According to Johns Hopkins, in 2020 there were 1 million more deaths from all casues that were recorded, compared to 2019.

In 2016 there were about 1 million more deaths from all causes that were recorded compared to 2015, according to Johns Hopkins.

In terms of the number of cases, a number of virologists have said that often samples were amplified in excess of recommended levels, causing many false positives to be recorded.

However the public view the virus, what seemed to be more certain have been the effects of lockdowns and quarantines that were imposed during the past few years.

The combination of programs that massively increased the money supply, for example, since March of 2020, the US Federal Reserve added over $4 trillion until the past few months, and lockdowns contributed to the increase of rates of inflation.

While embargoes and blockades against Russia have reduced the supplies of wheat and oil, the effects of lockdowns and quarantines predated by many months that country’s invasion of Ukraine.

The US Department of Commerce recently reported that consumer price index was over 8% higher than it was in March of last year.

That increase represents the greatest increase in prices seen since the early 1980’s.

In the early 1980’s, the Federal Reserve imposed substantial increases in interest rates.

Those policies and the falling prices of petroleum reduced inflation rates.

During the past several months oil & gas prices have increased noticeably.

US government statistics concerning inflation often rely on what’s called “core inflation”, which excludes items like fuel and food, which officials say are deemed too volatile to include in metrics or rates of inflation.

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