BEIJING, (Reuters) – China’s economy slowed sharply in April due to widening COVID-19 restrictions. This had a significant impact on industrial production, consumption and employment. It also raised concerns that the economy might shrink during the second quarter.

A number of cities were subject to partial and full lockdowns in March and April. There was also a long-term shutdown in Shanghai commercial centre. Shoppers and workers were kept at their homes, causing severe disruption to supply chains.

According to data released Monday by the National Bureau of Statistics, April’s retail sales declined 11.1% compared with a year before, marking the worst contraction since March 2020. It was worse than the 3.5% drop in March and missed forecasts of a 6.1% decline.

In some provinces, dining-out was suspended. China’s April auto sales plunged 47.6% compared to a year ago as Chinese car manufacturers cut production amid empty showrooms.

The anti-virus measures caused supply chain disruptions and paralyzed distribution. Industrial production dropped 2.9% from one year ago. It was significantly worse than the 5.0% March gain and lower than expectations of 0.4% growth. This was the biggest decline since February 2020.

It also had an impact on China’s economy and job market. Chinese leaders are known for prioritizing economic stability over social instability. Nationally, 6.1% of the unemployed rose from 5.8% in February to 6.1% in April. This is the highest level since February 2020 (when it was 6.2%).

In 2022, the government intends to maintain a low unemployment rate of 5.5%.

China is determined to create over 11 million new jobs and, preferably, 13 million in urban areas this year. Premier Li Keqiang stated that China wanted more than 11,000,000 jobs. However, he said recently that the employment situation was “complicated” and “stretched” after the worst COVID-19 epidemics since 2020.

Beijing’s main source of investment to boost its economy is fixed assets. In the four first months of 2018, Beijing saw a 6.8% rise in year-on–year investments, as opposed to the expected 7.0% increase.