There are increasing signs that China’s economy is slowing sharply because of the lockdowns. Activity in China’s services sector contracted at the steepest pace in two years in March as the surge in cases restricted mobility and weighed on demand. The closely watched Caixin purchasing managers’ index (PMI) dived to 42.0 in March from 50.2 in February. A drop below the 50-point mark separates growth from contraction.
The same survey showed a contraction in the country’s giant manufacturing sector last week and economists warned on Wednesday that there could be worse to come as the Shanghai lockdown begins to affect the figures for the coming months.
Stock markets in Asia were a sea of red on Wednesday with the Nikkei down 1.5% and the Hang Seng off more than 2%. European markets were also down in early trade.