An official index of non-manufacturing business activity rose to 52.7 in December from 52.3 in November, a sign that the services sector is continuing to recover, too.
Economists project growth of roughly 7.8% this year, but 2022 is a different story, with major banks cutting their growth forecasts to between 4.9% and 5.5%. That would be the second slowest rate of growth since 1990, when the country’s economy increased 3.9% following international sanctions related to the 1989 Tiananmen Square massacre. China’s economy grew 2.2% in 2020.
Both companies said they’ve had to adjust operations in the city, which is experiencing one of China’s worst community outbreaks of the pandemic. Authorities have responded by enacting sweeping measures with an intensity and on a scale rarely seen since Wuhan, the pandemic’s original epicenter.
And Samsung — which has invested more than $10 billion in Xi’an, and employs more than 3,300 people there — said that it it had to “temporarily adjust operations” in the city. It added that it plans to take “all necessary measures, including leveraging our global manufacturing network, to ensure that our customers are not affected.”
Any slowdown in output from the city risks worsening the global chip shortage, an ongoing crisis that has limited the supply of everything from iPhones to new cars.
— Diksha Madhok and Laura He contributed to this report.