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Shanghai’s economy shrinks again in May but at slower pace

CNA – Shanghai’s economy contracted for a second month in May although at a somewhat slower pace, data from the local statistics bureau showed yesterday, weighing on the commercial hub’s recovery prospects following a two-month COVID-19 lockdown.

Industrial output of Shanghai, which sits at the heart of manufacturing in the Yangtze River Delta, fell 27.6 per cent last month from a year earlier, but the drop was less sharp than the 61.5 per cent slump in April.

As residents were confined to their homes and stores were shut, retail sales of China’s most cosmopolitan city of 25 million people shrank 36.5 per cent.

The number, however, was an improvement from a 48.3 per cent tumble in April.

Even though Shanghai eased some curbs since late May and removed full-city lockdowns to resume work since June 1, it still requires all of its districts to organise mass COVID testing for residents every weekend until the end of July.

The city reported two new local symptomatic cases for June 16, compared with nine a day earlier, and two new local asymptomatic cases versus seven the previous day, local government data showed.

A man rides past mannequins wearing Chinese cheongsam at a shop in Beijing. PHOTO: AP

After being hit badly by the lockdown measures with factories shutting down and foreign businesses reconsidering investment plans, it may be a long time before the area’s economy gets back on solid footing.

Fixed-asset investment in the city dropped 21.2 per cent in the first five months from the same period a year earlier, compared with the 11.3-per -cent loss in January-April.

Property sales by floor area shrank 23 per cent in the first five months, worse than the 17-per-cent decline in January-April.

Production at Tesla Inc’s Shanghai factory is set to fall by over a third this quarter from the first three months of the year, outpacing CEO Elon Musk’s prediction.

Shanghai Disney Resort said on Tuesday it will re-open Disneytown and Shanghai Disneyland hotel on June 16, but the main Disneyland park will remain closed until further notice.

To boost the economy, Shanghai officials announced 50 policy measures to help enterprises and encourage more consumption, including ramping up the issuance and use of local government bonds and asking banks to renew loans for small firms.

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