ONE Chinese The cabinet official said on Monday that the country’s stagnating economy is recovering as the country eases its coronavirus restrictions and as companies in Shanghai, China’s richest and most populous city, are allowed to resume operations.
Of the 9,000 largest industrial companies in Shanghai that were forced to close starting in late March, about half have resumed work, according to Fu Linghui, director of statistics for the National Bureau of Statistics.
The government is seeking to reverse an economic downturn without turning its back on the “zero-COVID” strategy that has shut down parts of several major cities and is demanding that every person infected with coronavirus be quarantined.
“We believe the economy’s operations will gradually improve in May as logistics are freed up to ensure smooth access and increased support for the real economy,” Fu said at a news conference.
Communist Party leaders said after a meeting earlier this month that COVID-19 mitigation measures will take precedence over the economy.
Efforts to control the virus have shut down businesses or suspended access to industrial centers in several cities across the country.
Chinese leaders have pledged to provide entrepreneurs with tax refunds, cheap loans and free rent. Repeated shutdowns, however, have disrupted production, retail and exports.
Retail sales fell more than 11% in April compared to that time last year after COVID-19 restrictions closed shops, restaurants and other consumer businesses in Chinese cities, according to official data shown on Monday.
Manufacturing also saw a decline of almost 3% after factory closures. Factories that kept the business open with employees living at their workplace had to cut back on production due to the disruption in the supply of components, the data revealed.
Fu said the Chinese government has not yet collected data for May, but that the economy appears to be improving based on “physical volume indicators.”
“I think the second quarter will maintain good growth momentum,” he said.
The government announced that Shanghai will gradually reopen shopping malls, vegetable markets, hair salons and other businesses from Monday.
The Associated Press contributed to this report.