Beijing: China’s President Xi Jinping’s “Zero Covid Policy” has delivered a severe blow to the Chinese economy. Along with the Chinese industrial output, a sharp fall has been reported in retail sales, fuel imports, energy production and employment. A few days ago, it was reported that President Jinping would have to resign due to the failure of his policy on Coronavirus. Against this backdrop, the new fall draws attention.

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The last few months have seen a spate of new corona outbreaks in China. The eruptions in the capital, Beijing, and the financial centre, Shanghai, have been significant. Last week, the number of new Coronavirus cases in these two cities and other leading cities and provinces reached 10,000 per day. The Zero Covid Policy has been implemented in Shanghai since late March and in Beijing since mid-April. Strict implementation of the Zero Covid Policy has not been very successful in reducing the number of patients. On the contrary, it is hurting the Chinese economy.

Figures released by the Chinese government on Monday portray the picture of the impact of the Corona sanctions on the economy. Industrial production in China fell nearly 3% in April. Retail sales, one of the key components of the Chinese economy, fell as much as 11%. Vehicle sales have fallen by 31% in just one month. Revenue from the catering sector declined by 22.7 per cent.

Chinese fuel imports also fell by more than 10% in April. Domestic power generation fell by 4.3%. Employment in China has also been hit hard by the Zero Covid Policy. Unemployment in the country’s top 31 cities has risen to 6.7%. Unemployment in China has increased to six per cent, the highest in two years. A few days ago, Chinese Prime Minister Li Keqiang drew attention to the rising unemployment rate in the country.

The leading website, Bloomberg Economics, claims that China’s economy contracted by 0.68% in April due to a decline in key sectors. Some analysts and financial institutions have predicted a recession in the Chinese economy in the second quarter of the year. In the first quarter of 2022, China’s economy grew by 4.8%. The decline in the first quarter was significant as China’s ruling party set a target of 5.5% for this year. The downturn in China is affecting global supply chains, exports and trade. The production in several leading MNCs has been hit hard, and the repercussions are being felt in the stock market.

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