Faced with its worst Covid-19 outbreak yet, China has been imposing an expanding number of mass quarks. Official data released on Monday show that the measures are taking a toll on the world's second-largest economy.
In the first three months of this year, China's economy grew at a faster rate than it did in the same period last year. The pace was barely faster than the last three months of last year, and it obscured a looming problem.
The growth was recorded in January and February. Shenzhen, the technology hub in the south, and Shanghai, the country's biggest city, shut down last month as economic activity slowed. Truck drivers were trapped, assembly lines were suspended, and ports were snarled. Hundreds of millions of consumers were confined at home.
The National Bureau of Statistics said retail sales fell in March from a year ago. The factory output grew at a slower rate than in the first two months. In the first two months of the year, imports had been rising, but fell last month because of transportation issues.
More regions are expected to be placed under restrictions this month due to the slowdown that started in March. This is bad news for China's leaders, who have set a growth target for the year.
A week ago, the premier called for a sense of urgentness in telling local officials to limit the effects of Covid shutdowns on the economy. China's central bank acted on Friday to help commercial banks lend more.
Daily business updates The latest coverage of business, markets and the economy, sent by email each weekday.China's Covid shutdowns could feed inflation by disrupting the supply chains that many manufacturers rely on, pushing up the cost of making and transporting goods. A sluggish China would import less from other nations, whether it is natural resources like oil and iron Ore or consumer goods like cherries or designer handbags.
It will have an effect on the whole circle of the Chinese economy if the outlook on Shenzhen and Shanghai is correct.
Executives in the auto industry and tech sector, two of China's biggest employers, have begun warning in recent days of devastating disruption to their nationwide operations if Shanghai cannot reopen soon. The city makes many high-tech components that are crucial to many supply chains.
If the hub fails, the whole system won't work, according to the secretary general of the China Passenger Car Association.
By April 11, 87 of China's 100 largest cities had imposed some form of restriction on movement. In Shanghai, where most residents have not been allowed to leave their homes, there were limits on who could enter or leave the city.
The manager of a factory that makes plastic molding machines was forced to stop work after his town imposed a lockdown.
The authorities had imposed restrictions on the movement of trucks. Mr. Yang couldn't get components on time to build his machines and couldn't deliver finished equipment to many factories and ports.
He said he didn't know when he could reopen.
The string of municipal lockdowns has weakened a little recently, but more and more cities are imposing them. Gavekal says the number of large cities with severe lock downs fell from 14 to six. The economic output of these cities decreased from 14 percent to 8 percent.
Local governments have been ordered by Beijing to help trucks reach their destinations and take other measures to shield the economy from harm. On April 9, Nio halted car assembly in Hefei. Hefei was not locked down, but crucial components suppliers were in other places. The company was able to resume limited production by last Thursday.
Many workers are struggling. Truck drivers are often not paid even when interest payments on their trucks keep falling due.
Many Chinese truck drivers are stuck because of epidemic control measures, and Yu Yao is one of them. He has been trapped in China for three weeks.
Mr. Yu went to deliver vegetables to the market. He was still in the city three days later when the authorities identified him as a close contact of an infectious person. The police ordered him to be isolated. He stopped his truck and waited.
He has been waiting for a long time. No one has brought him to a hospital. He doesn't have a permit to drive a truck in Shanghai during the lockdown. He and four other drivers slept on the ground and shared bread for three weeks.
We can't get off the highway because every exit is guarded. Mr. Yu said they just want to go home.
China's economy continued to grow in the first three months of the year, with exports being one area of growth. Chinese factories have grabbed a larger share of world markets during the swine flu epidemic, with exports jumping 14.7% in March from a year ago. Multinational companies rely on large networks of components suppliers in China.
At least a few importers in the West are starting to look elsewhere for supplies as China continues to disrupt production. Jake Phipps, the founder of the American importer and distributor of home furnishings that sells to hotel and apartment developers, said that he had been shifting many orders away from China in the past two years.
He is buying kitchen cabinets from Vietnam and Turkey, vinyl flooring from Vietnam and India, and sinks from Malaysia. A shipment of plumbing supplies was delayed last month because of a lockdown in part of Ningbo, near Shanghai. Many customers are wary of using China because of tariffs, tensions and questions about China's role in the origins of the coronaviruses, he said.
Mr. Phipps saidReliability has made him move and the comfort of customers not wanting to order from China.
Li You was involved in research.
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