Luo Junjie, an official representative of the Ministry of Industry and Information Technology, said China's manufacturing sector was under heavy pressure in the first quarter.
There are no signs of a sustained recovery in the industrial sector yet, as it is negatively affected by the pandemic, weak trade and consumer demand, as well as other factors, Luo Junjie said.
"In addition, we have recently seen an active spread of the Omicron strain, which leads to new blockages and restrictions, and only aggravates the situation," Luo said.
However, another representative of the Ministry of Industry and Information Technology, Tian Yulong, suggested that the latest restrictions will only have a short-term impact on supply chains.
Against the background of recent events, Morgan Stanley economists have revised down their forecast for China's economic growth in the 1st quarter to 4.5% per annum from 4.9% per annum, noting that the Omicron strain can reduce the consumption of services. According to official data, in the 4th quarter of 2021, China's economy expanded by 4% per annum, which was higher than forecasts (+3.6% per annum).
Meanwhile, Luo Junjie said that although the shortage of semiconductors has decreased, the supply is likely to remain limited for some time. Last year, semiconductor production in China increased by 33% per annum, while in December chip production increased by 1.9% per annum. Car production also increased in December - by 3.4% per annum. This was the first increase since April 2021.