Shanghai’s Economy Takes Hit in April Amid Citywide Lockdown

By Alex Wu
Alex Wu
Alex Wu
Alex Wu is a U.S.-based writer for The Epoch Times focusing on Chinese society, Chinese culture, human rights, and international relations.
May 21, 2022 Updated: May 22, 2022

Shanghai’s economy was hit hard in April by a nearly two-month-long lockdown because of COVID-19.

The latest data published by authorities show that in April, the total industrial output in Shanghai fell by 61.5 percent year-over-year. An expert pointed out that the Chinese communist regime’s extreme lockdown of Shanghai under its “Zero-COVID” policy has crushed investors’ confidence.

According to the numbers released by the Shanghai Municipal Bureau of Statistics on May 20, the total output value of industrial enterprises in Shanghai in April was 128.617 billion yuan ($19.22 billion), a 61.5 percent tumble from the same month a year ago. The numbers for the first four months of this year show a 12.5 percent slide from the year-earlier period.

April’s data show that only the total output value of the oil and natural gas industry had growth and that the rest of the industries had a steep decline. Among them, key industries, such as automobile manufacturing, fell by 70.9 percent year-over-year, and the transportation equipment manufacturing industry plunged by 88.9 percent year-over-year. Newly begun commercial housing development in Shanghai dropped by 47.1 percent from January to April, and the sales of commercial housing fell by 17 percent.

Epoch Times Photo
Tesla’s China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai on Jan. 7, 2020. (Aly Song/Reuters)

Taiwanese financial expert Henry Wu told The Epoch Times on May 20 that the economic figures show that the problem is very serious and that the consequences of Shanghai’s lockdown are too severe.

“Due to the COVID-19 pandemic, materials and parts cannot be shipped in. Inventories are running out. Even if products are made, they cannot be shipped out, and the companies have suspended production, so we see the economy plummet like an avalanche. The situations for the manufacturing and service industries are the same. Economic data in many sectors have fallen sharply, indicating that many industries are basically unable to function normally,” he said.

Tesla’s Shanghai plant reported zero exports of its Chinese-made models in April.

Wu said both Chinese and foreign companies are traumatized by the indefinite lockdown and plan to evacuate and move to other countries “because they see that the regime’s measures to deal with the [pandemic] have reached absurd and inhumane levels.”

The released official data also show that the total output value of Shanghai’s large industrial enterprises in April fell by 58 percent year-over-year, that of medium-sized industrial enterprises dropped by 57.7 percent year-over-year, and that of small industrial enterprises declined by 69.4 percent year-over-year.

Epoch Times Photo
Employees work on the production line of Kent bicycles at Shanghai General Sports Co., in Kunshan, Jiangsu Province, China, on Feb. 22, 2019. (Aly Song/File Photo/Reuters)

Wu says large- and medium-sized enterprises can still hold up for a while, but the small enterprises may not have so much cash to continue running.

“They cannot afford the expenses of employees’ salaries and rent. If there is no revenue, no profits, and then no production activities, the spare funds will soon run out. So they won’t last,” he said.

Wu says that after Shanghai’s lockdown is lifted in the future, people won’t dare to make long-term plans in Shanghai.

“The resumption of production may have a little short-term effect, but it will not last and may cause new problems,” he said.

Wu said the current problem lies in the crisis of confidence.

“Consumers’ and investors’ decisions are all based on confidence,” he said. “The lack of transparency of the [Chinese regime’s] policies affects their confidence. The CCP system itself produces the economic crisis. The government’s power is unchecked, unsupervised, and there is no transparency and no stability. Everyone is scared by the extreme measure of the lockdowns. So they lost confidence in the system.”

Luo Ya contributed to the report.

Alex Wu
Alex Wu is a U.S.-based writer for The Epoch Times focusing on Chinese society, Chinese culture, human rights, and international relations.