China’s industrial groups posted their worst decline in profits in two years in April, in the latest sign of the economic and corporate pain stemming from a wave of coronavirus lockdowns, reports the Financial Times. Industrial profits dropped 8.5% in April compared with the same period a year earlier, the measure’s worst fall since March 2020, when China was also gripped by restrictions to combat the initial outbreak of the virus.
The contraction piles greater pressure on the government, which has insisted on maintaining its zero-Covid policies that seek to eliminate infections through mass testing, lockdowns and quarantine.
The strategy is a priority for Chinese leader Xi Jinping this year as he bids for an unprecedented third term in power, but its mounting economic costs pose a grave threat to the country’s growth target of 5.5% for 2022.
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