That's year on year, A drop last seen at the outbreak of the pandemic Industrial production meanwhile, fell about 3%, unemployment reached more than 6% in urban areas.

Dozens of chinese cities remain in tight lockdown, including the world's largest ports city, Shanghai.

Alright, My colleague Clifford Coonan joins me in studio for more Clifford.

How unexpected or expected were these numbers?

Well, they're they're certainly surprising and they're worse than the forecasts had had had predicted.

But at the same time, what's really surprising, I think is just the extent, you know, the depth of the slowdown.

It was obviously um partially because of, largely because of the lockdown in the in the major cities, but it's hit retail sales which were which the government has long relied on to prop up the economy.

Things like passenger car sales are down 47%.

And then, and that sort of feeds into other areas, for example, you know, the passenger car sales falling so much that accounts for so many jobs.

So we have this problem with unemployment as well rising and the figures are the worst in two years.

But when you think about it two years ago was also pandemic related, You know, So really these are these are the worst in in, in since they've been records in china particularly cause unemployment data is quite recent in china.

So we're looking at all sectors of the economy struggling from this and it's it's prompting a lot of questions about the depth of the economy.

One of the questions is prompting is what does it mean for Western business?

So many of them, you know, relying on cities like Shenzhen shanghai to either manufacturer to ship to both.

I mean what does it mean for them?

Are they reconsidering what they're doing in china?

Absolutely.

I mean, I'll give an example, there's a lot of there's a lot of foreign teachers in china for example, and one of the headmasters of one of the most prominent of foreign schools in in china just left.

He didn't with without saying anything because he didn't think he'd be able to get out.

The lockdown has had a huge impact on people and it's caused quite a scandal in china.

And it's not unusual a lot of people, foreigners working in china now are worried because the level of micromanagement that's going on with the lockdown is incredible.

And it means that if you're trying to hire hire foreigners and china still needs foreign talent to keep keep economic growth going.

It's becoming a real challenge means the government's almost more inscrutable in some ways, you don't know when the lockdown is coming.

You don't know if you're going to be able to move around and do business.

Exactly, and it shows up, I mean, I think in some ways this is xi Jinping's Churchill moment, he's treating it like a um like a war on covid standing his ground.

Exactly, and which means he's been very, very rigid and the level of micromanagement is incredible, people, you know, every three days you get a knock on the door and you're forced to take a test, you know, and this is, this is proving a real problem.

And what's the domestic support for that line though within china, I mean, is there disagreement with this hard, hard line when you're seeing the economic numbers just plummet like this?

Well, I think this is going to be the factor, it's going to really hit support for the government because they're thinking because because a microphone isn't as bad as the other variants, there's increasingly a lot of dissatisfaction about this and there's a lot of censorship on, on trying to stop it.

Is this a phase when we look at omicron and and we know the pandemic isn't necessarily a phase, but does Beijing see this perhaps the phase, once they get through this, they'll just turn the economy back on.

Yeah, this is, I think there is a feeling that you can turn it on and off and this is gonna be obviously a test of that, I think to a certain extent they can, you know, because foreign companies are still deeply embedded there, you know, with the supply chain, they're not going to be in Vietnam or Exactly, they these countries just don't have the infrastructure that china has, they don't have the scale that china has and India isn't there yet another possibility?

So I think people are still going to be in china, but I think I think that thinking about china has changed even in Germany where which is always which is very very involved, heavily invested in china is also now looking at things like we saw Volkswagen recently is looking quite closely at the United States America.

That's right.

You know, so people are thinking it's less there's less of a sort of a focus on china that there was so ultimately they will the economy will come back but maybe in a different way.

Alright, my colleague D.

W.

Businesses, Clifford Coonan, thank you very much.