Beijing (awp/afp) – Activity in services collapsed last month in China under the effect of anti-Covid restrictions. The purchasing managers’ index (PMI), calculated by IHS Markit and published Thursday by the media group Caixin, stood at 36.2 in April against 42 in March.
This is its biggest fall since February 2020, when China’s economy was crippled by the first global wave of Covid-19. It is also the second consecutive month of decline in activity: a number above 50 indicates an expansion in activity and, below, it reflects a contraction.
This result is much worse than expected by analysts, who on average expected a decline in the index to 41, according to the estimate of the financial agency Bloomberg. “The imposition of stricter anti-Covid measures led to a faster decline in service activity and revenue in April,” Caixin said in a statement.
China, which continues to follow a strict zero Covid strategy despite a much lower number of contaminations than the rest of the world, confined its economic capital, Shanghai, in early April. This measure is seriously disrupting business and supply chains across the country. Some services are idling, including transport, tourism or catering.
The composite index published by Caixin (aggregating the activity of services and that of the manufacturing industry) also collapsed in April, falling to 37.2 against 43.9 in March, also the lowest since February. 2020. On Saturday, Caixin announced a drop in its manufacturing activity index, which fell to 46 in April from 48.1 in March.
Most experts doubt that China will manage to achieve its 5.5% GDP growth target this year, despite announced massive investments in infrastructure.