Jane Lanhee Lee, Josh Ye

(Reuters] – China’s economy is recovering after being hit hard by COVID-19 lockdowns. But businesses, including retailers and chipmakers, warn of slowing sales. This comes as the nation tightens its spending.

The world’s biggest auto market has seen a slowdown in car sales. Gamers are not buying as many consoles. People are reluctant to buy new smartphones, laptops or TVs.

Colette Kress is chief financial officer for Nvidia (NASDAQ), a U.S.-based chipmaker. She said, “The current China Lockdowns… have implications to both supply AND demand.” Nvidia forecasts that gaming sales will suffer $400 million from China’s coronavirus restrictions.

There are large, lock-down cities. They focus their attention on the most important matters for citizens. This is reducing our demand.”

China’s zero COVID policy has been embraced by Beijing. The 22 million-strong city is limiting attendance at work in line with the country’s zero COVID strategy. Partially locked down or other curbs are used to entrap Shanghai, China’s largest city and commercial center.

After falling 3.5% for March, retail sales declined 11.1% in April. UBS, J.P. Morgan and others reduced their China full-year GDP growth projections to 3.7% and 3.5% earlier this week.

Premier Li Keqiang stated Wednesday that China will strive for reasonable economic growth and to reduce rising unemployment. To support China’s second largest economy, the cabinet announced tax credit reductions that are larger and delayed social security payments.

JD E-commerce Group (NASDAQ:).com Inc last week said that COVID-19 was far more severe than the previous outbreaks in China. These were smaller cases and had benefited online shopping.

Due to logistical problems, April’s order cancellation rate was much higher than it was last year. Xu Lei, JD.com CEO, stated that there was a slight improvement in May but still an increase over a year ago.

Consumers are experiencing a loss of income and confidence. Overall consumption is slow.”

AUTO, TECH AND LUXURY SLOWDOWN

China’s auto sales are down after years of record-breaking growth. Global automakers have also suffered.

Tesla’s (NASDAQ:) sales in China, where it has been struggling to get production to pre-pandemic levels, was almost wiped out last month.

Retail car sales rose by 34% in the first three weeks, but were still 16% below a year ago, according to the China Passenger Car Association. They also called for greater government support.

According to the industry group, a decrease in revenue related to COVID-19 is depressing sales even in areas of China not yet locked down.

Lenovo, the largest manufacturer of PCs in the world, announced Thursday that it experienced its lowest quarterly revenue growth for seven quarters. This was due to a decline in personal computer demand after two years of flood-driven demand.

China’s PC sales, including notebooks and desktops, decreased by 1% over the period January to March, Canalys Market Data firm said Thursday. It ended China’s seven-year streak of strong growth.

Tencent, China’s largest company by value, had its worst quarter since 2004 when it was listed. This is due to cuts in advertising spend from consumer and e-commerce businesses.

Foxconn, Apple’s supplier, warned of a decline in smartphone demand in China. The country was once a hub for luxury goods manufacturers like LVMH but has now seen its luxury sales plummet.

Johann Rupert Chairman, Swiss company Richemont, stated last week that “Even if China is able to come out of its isolation, it will take a longer time for the rebound to be as rapid and as instant as in Europe or the United States.”