China's economic activity cools in April as lockdowns bite

China's economic activity cooled sharply in April as widening COVID 19 lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears that the economy could shrink in the second quarter.

In March and April, full or partial lockdowns were imposed in dozens of cities including a protracted shutdown in commercial centre Shanghai, keeping workers and shoppers confined to their homes and severely disrupting supply chains.

Retail sales fell by 11.1 per cent from a year earlier in the month of March, the biggest contraction since March 2020, according to data from the National Bureau of Statistics on Monday. The reading worsened from March's 3.5 per cent fall and missed the forecasts for a 6.1 per cent drop.

In some provinces, dining-out services were suspended and China's auto sales plunged by 47.6 per cent from a year ago as car makers slashed production due to empty showrooms and parts shortages.

Industrial production fell 2.9 per cent from a year ago, notably worse than a 5.0 per cent gain in March, and was below expectations for 0.4 per cent growth. The reading was the largest decline since February 2020.