China’s Manufacturing and Services Sectors Continued to Contract in May Under the Impact of Lockdowns

China’s manufacturing purchasing managers’ index rose to 49.6 in May from 47.4 in April, according to China’s National Bureau of Statistics (NBS). The Chinese composite PMI rose to 48.4 in May from 42.7 in April.

An index below 50 indicates that both China’s manufacturing and non manufacturing sectors are still contracting.

The data reflect that China’s manufacturing, service, and construction sectors have been hit hard by lockdown measures to contain the spread of COVID-19 in key cities such as Shanghai, China’s financial center.

Mr. Li Keqiang, Prime Minister of China has called on Chinese officials to try to cut the unemployment rate and bring the economy to a more reasonable pace in the second quarter of this year. China’s April unemployment rate hit 6.1 percent, its highest level since February 2020.

Keqiang admitted that China may miss its target of 5.5% growth this year, while most economists expect China’s 2022 GDP to grow only 4.5%, well below the Chinese government’s target.

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