Industrial production in the Chinese financial metropolis fell by 7.5% in March compared to the same month last year. This is the first decline in two years.
The corona lockdown, which has lasted nearly four weeks, is slowing the economy in Shanghai. Industrial production in China’s financial hub dropped 7.5 percent in March from the same month last year, according to official data released by authorities on Friday. This is the first drop in two years, as the economy suffered with the onset of the pandemic.
“The current virus outbreak has severely affected the industrial activities of the city,” said the head of the local planning authority, Wu Jincheng. In the first quarter as a whole, however, industrial production grew by 4.8%.
Headquarters of many large corporations
Shanghai is a modern financial and industrial center. With 26 million inhabitants, the country’s largest city is home to factories such as those of US automaker Tesla or Chinese chip leader Semiconductor Manufacturing International. It is also home to many international companies in mainland China. More than 2,000 German companies are also based there. In the face of the Corona crisis, the Chinese central bank promised to continue its policy of stimulating the economy. “We are also willing to support small and medium-sized businesses with more tools if needed,” said central bank governor Yi Gang.
The president of the German Federal Association for Wholesale, Foreign Trade and Services (BGA), Dirk Jandura, warns of missing deliveries and rising transport costs due to congestion of hundreds of cargo ships off Shanghai. “A short-term relaxation of the situation is not to be expected,” Jandura told the newspapers of the Funke media group (Friday editions). China’s zero Covid strategy is crippling port operations with serious consequences for the global economy. If China’s corona containment strategy reaches its limits, the situation for foreign wholesalers and traders will worsen, Jandura said. In this case, deliveries would be delayed or not delivered and transport costs would continue to increase. “Price increases fuel inflation and, of course, it is also passed along the supply chain – in the end, the consumer feels it too.”
City Hall speaks of early successes
The Shanghai city administration spoke of early successes in containing the corona outbreak. Infection numbers showed a “positive trend” and life could soon return to normal. The prerequisite for this is that residents follow strict rules to contain the spread of the virus. However, some neighborhoods tightened movement restrictions. Nearly 18,000 new infections have been reported recently. A total of 36 people have died in connection with the virus in the last five days. Many residents assume significantly more victims.
(APA)