China’s zero-Covid strategy is an unexpectedly heavy burden on the industry
Sentiment in Chinese industry unexpectedly deteriorated in July under the pressure of strict zero-Covid measures in China. The economic recovery is suffering from the strict measures.
The official Purchasing Managers’ Index (PMI) fell from 50.2 in the previous month to just 49 points, as the statistics office in Beijing announced on Sunday. Such a value below the 50 mark on the important economic barometer indicates a decline in industrial activity in China. Experts had actually expected a value of just over 50 points, similar to the previous month.
The government actually wanted to achieve growth of 5.5 percent this year, but this seems less and less realistic. Due to the Covid restrictions and the ongoing real estate crisis in China, experts only expect growth of around four percent.