China’s growth plunged sharply in March. This was mainly due to the resurgence of the Covid pandemic in China, which is why the economic downturn had been widely expected. Over the entire first quarter, from January to March, GDP actually grew by 4.8 percent. While this is remarkable, the data for the three-month period cannot hide the ongoing difficulties that have emerged since the large-scale lockdowns in Shanghai and other regions across China: retail sales dropped by almost two percent in March alone. This is alarming, because the purchasing power of China’s consumers has so far been a vital pillar of the global economy.
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