Government data released on Monday shows China’s unemployment rate rose to 6.1% in April. It is the highest unemployment rate recorded in China since February 2020 during the early stages of the COVID-19 outbreak.
The nation’s industrial output also fell 2.9% year-on-year in April, while retail sales crumbled 11.1%.
But a key economic indicator, China’s value-added industrial output (up 4% year-on-year), provided some optimism amongst an otherwise grim April data release.
China’s National Bureau of Statistics suggested April could be the peak of the nation’s current economic slowdown.
“We believe the operation of the economy is gradually improving,” said Fu Linghui, a spokesman for the National Bureau of Statistics.
“The pace of recovery in consumption will accelerate as the impact of the epidemic is brought under control.”
Around 50% of the biggest industrial enterprises in Shanghai have resumed operations in the past few days according to Linghui.
Also on Monday, The People’s Bank of China left interest rates on hold despite April’s grim economic data. The move is widely seen a way of preventing further yuan devaluation against the USD – lower rates would see capital move out of China to countries with rising or higher rates.
End to Shanghai lockdowns in sight
In a further major development on Monday, Shanghai’s Deputy Mayor Zong Ming, revealed plans for the return of more normal life in the locked-down city from 1 June.
Ming said Shanghai’s reopening would be carried out in three stages, with movement restrictions to stay in place until 21 May, before a gradual easing.
“From 1 June, to mid- and late June, as long as risks of a rebound in infections are controlled, we will fully implement epidemic prevention and control, normalise management, and fully restore normal production and life in the city,” said Ming.
Chinese stocks flat as investors contemplate a brighter outlook
The economic data, along with the statements made by both China’s National Bureau of Statistics and Shanghai’s Deputy Mayor, saw Chinese stocks remain flat on Monday.
The Hang Seng Index gained 0.25%, the CSI 300 lost .8% and the Shenzhen and Shanghai Composite Indexes both lost around half a percent.
Last week, emerging markets investor Mark Mobius said he believed the Chinese stock market rout had come to an end.
“Obviously, the Chinese Government wants the market to perform better. We are probably reaching the bottom or near the bottom and the market is probably going to recover,” he said.