While the majority of China’s new Covid cases are concentrated in Shanghai and Beijing, data reveal that the impact of business restrictions is far-reaching.
According to a study conducted late last month by the EU Chamber of Commerce in China, about 60% of European enterprises in the country stated they were lowering their income expectations for 2022 as a result of Covid regulations. According to the chamber, more than half of those cutbacks ranged from 6% to 15%.
Monthly polls issued in the recent week among Chinese firms revealed that mood among manufacturing and service businesses declined in April to its lowest level since the pandemic’s initial shock in February 2020.
Official and third-party versions of the poll, known as the purchasing managers’ index, indicated that economic activity had contracted more since March.
The most recent publication was the Caixin services PMI, which fell to 36.2 in April. That is much below the 50 line, which denotes contraction or expansion.
According to a press statement, expectations for future output have improved marginally. However, “some worries have been raised about how long it may take to properly contain the virus and return to more typical business circumstances.”