Dec 31 (UPI) — China’s manufacturing activity shrank for the third straight month in December as COVID-19 infections continued to sweep the country after Beijing eased restrictions.

The official purchasing managers index (PMI) fell to 47.0 from 48.0 in November, the Office for National Statistics (NBS) reported on Saturday.

It was the biggest one-month drop since February 2020.

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The epidemic weighed on the December reading, Chinese senior statistician Zhao Qinghe told state news agency Xinhua.

The services sector was also weaker as COVID-19 and other factors weighed on market activity. The business activities sub-index fell 5.7 percentage points from the previous month to 39.4.

China is currently experiencing its first major outbreak of COVID-19 since the pandemic originated there. In the first 20 days of December, around 250 million people were infected with the virus.

China is no longer reporting asymptomatic cases and has closed a network of PCR testing sites. People who are using rapid antigen tests to detect infections are under no obligation to report positive results.

The Chinese government has said it will not quarantine travelers on arrival in the mainland from Jan 8, in another big step towards relaxing its “zero-COVID” lockdown policies.

Despite the latest wave, Zhou Hao, chief economist at brokerage Guotai Junan International, told CNBC that he believes econoooooooooooooomic activity will start to pick up.

“Overall, we believe the worst for the Chinese economy is over and a strong economic recovery is on the way,” he said.

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