Attempts to boost flagging GDP growth hindered by Covid lockdowns, Ukraine war and Sino-US

tensions

Vincent Ni China affairs correspondent

Fri 20 May 2022 12.25 BSTLast modified on Fri 20 May 2022 14.14 BST

China’s economy is struggling. This week, official data showed a sharp fall in economic activity in the past month, as
lockdowns confined hundreds of millions of consumers to their homes and hit supply chains. Retail sales in April
shrank more than 11% from a year earlier – the biggest contraction since March 2020, shortly after the Covid
outbreak.

In March, the premier, Li Keqiang, pledged to grow China’s GDP this year at “around 5.5%” – the lowest official
target in three decades. However, Fitch ratings earlier this month cut China’s 2022 forecast GDP growth further, to
4.3% from 4.8%. Meanwhile, according to state media, fiscal revenues plunged last month across Chinese cities as a
result of Covid lockdown measures.

On Friday, the People’s Bank of China cut a key mortgage interest rate from 4.6% to 4.45% – a record amount – to
support the property sector by reducing home loan costs across the country. However, there are growing calls for it
to do more.

Winnie Zhang, a product design senior at Shanghai’s Jian Qiao University, is one of the millions of young Chinese
feeling the pinch of the current economic situation. She is about to graduate from the university but is struggling to
find work. “Some companies have stopped sending out offers, or they are only having one round of interviews,” she
said.

Zhang said a lot of companies that have received applications haven’t responded, and many said explicitly that they
were not looking for employees to work remotely. “I think graduates this year would think they have more pressure
in job hunting compared with graduates in 2017 and 2016.”

Recent stringent lockdown measures in major cities, such as Shanghai, have made things worse. In April, according to
China’s official data, the unemployment rate rose to 6.1% – the highest level since February 2020. Nancy Qian, an
economics professor at the Kellogg School of Management at Northwestern University, said the real unemployment
situation may actually be worse because of the different ways Chinese statistics count joblessness.

“There are just not enough jobs to start with, as the economy began to slow a few years ago,” Qian said. “This is
really binding China now and there’s no quick fix. And to create more jobs, Beijing has to open up its markets. But
Covid, Ukraine as well as US-China geopolitical tensions are making it less likely in the short term.”

True/False

Sales have increased by 11% in the past year.

The GDP growth rate forecast for this year is 5.5%

Employment is one of the key problems facing the Chinese economy in 2022.

Unemployment rate has been stuck at 6.1% since February 2020.

The short-term problems preventing China from opening up its markets is threefold.

Find opposites to these words in the article

To struggle to cut sharp remotely stringent to rise a quick fix