Shanghai Economy Hit on All Sides in April by COVID-19 Lockdown

BEIJING—China’s commercial hub of Shanghai reported on Friday a broad decline in its economy last month when a city-wide COVID lockdown shut factories and kept residents at home, sparking concerns among foreign firms over their presence in the country.

Output of Shanghai’s industries, located at the heart of manufacturing in the Yangtze River Delta, shrank 61.5 percent in April from a year earlier, the local statistics bureau said.

That was worse than the 7.5 percent drop in March and was the biggest monthly decline since at least 2011.

Shanghai, where plants of companies including Tesla and Semiconductor Manufacturing International Corp are based, accounts for 30 percent of China’s key auto components manufacturing and 40 percent of its chipmaking capacity.

While Shanghai officials signaled they planned to reopen from the start of June, analysts say the spillover impact of its lockdown is far-reaching, raising concerns about China’s role in global supply chains as many multinational companies could reassess their operational risks in China.

Even if the lockdown is lifted next month, curbs on overseas travel of its citizens and the risk of further Omicron flare-ups are stirring uncertainty, representatives from the European Chamber of Commerce in China said during a roundtable on Monday.

“Many companies and individuals are seriously considering their China presence,” said Bettina Schoen-Behanzin, the chamber’s vice president.

Shanghai’s April retail sales nosedived 48.3 percent, significantly steeper than the 11.1 percent drop nationally and the city’s largest decline since at least 2011.

That dragged down overall retail sales in the Yangtze River Delta, which plunged over 30 percent.

Property sales by floor area decreased 17 percent in January-April versus growth of 4.0 percent in the first three months. In April alone, sales sank 88 percent, according to Reuters calculations based on the four-month data.