Activity at China’s primary factories continued to pick up this month, even as the country’s battles cursed Covid-19 outbreaks that threaten to hamper production.
Manufacturing activity rose to 50. 3 in December from 50. 1 in November, according to survey knowledge released Friday through China’s National Bureau of Statistics.
This was the time in a row when the reading recorded above 50, a point indicating an expansion rather than a contraction.
An official index of non-manufacturing business activity rose to 52. 7 in December from 52. 3 in November, a sign that the sector also continues to recover.
China continued its recovery this year after avoiding recession in 2020; however, the world’s second-largest economy is grappling with headaches that may weigh heavily on the expansion in 2022, from repeated Covid-19 outbreaks to disruptions in the chain of origin and the current housing crisis.
Economists expect an expansion of around 7. 8% this year, but 2022 is another story, with primary banks cutting their expansion projections between 4. 9% and 5. 5%. This would be the slowest rate of expansion since 1990, when the country’s economy grew at 3. 9%. % after foreign sanctions similar to the Tiananmen Square bloodbath in 1989 China’s economy grew by 2. 2% in 2020.
Continued genuine real estate turmoil continues to shake the economy. Genuine cash-strapped real estate developers, such as the massive conglomerate Evergrande, have cut jobs and abandoned assets to stay afloat, a major concern, given that the sector accounts for about a third of China. GDP. Evergrande said this week it is making progress on plans to deliver new homes this month, however, inventory faltered after another debt repayment deadline expired without any sign that the company has met its obligations.
There are also persistent threats to factory production. Two of the world’s largest chipmakers, Samsung and Micron, warned this week that Covid-19 outbreaks and strict lockdowns at China’s main shopping mall in Xi’an are affecting their operations.
Both said they had to adjust their operations in the city, which is experiencing one of the worst outbreaks of network pandemics in China. Authorities have responded by taking radical measures with an intensity and scale rarely felt since Wuhan, the original epicenter of the pandemic.
U. S. chipmaker Micron noted that blocking Xi’an may have an effect on the production of its DRAM memory chips, which are used in computers, as the company has had to downsize on site.
And Samsung, which has invested more than $10 billion in Xi’an and employs more than 3300 people there, said it needed to “temporarily adjust its operations” in the city. He added that he planned to take “all measures, adding leverage” to our global production network, to make sure our consumers are not affected. “
Any slowdown in the city’s production risks aggravating global chip shortages, an ongoing crisis that has limited production of everything from iPhones to new cars.
– Diksha Madhok and Laura contributed to this report.
The-CNN-Wire ™