Official data reveal that China's economy expanded in the first quarter, but lockdowns in major cities affected trade, retail spending, and factory output in March, The Wall Street Journal reported.
Lockdowns in Shanghai, China's financial and commercial hub, have shut factories and disrupted goods traffic to and from the city's port, one of the world's busiest, the Journal reported. Lockdowns are also affecting Beijing.
The war in Ukraine has inflated commodity prices and costs for businesses, disrupting global supply chains in wheat, oil, metals, and other goods. Inflation and slowing economies in Europe and the U.S. mean less demand for China's manufactured goods.
Despite these headwinds, Chinese President Xi Jinping wants China's economy to outpace that of the U.S. this year, the Journal reported.
Xi told senior economic officials that it is critical to show that China's economy is stable and growing. He wants the world to see that China's one-party system is superior to Western democracy, and that the U.S. is declining both politically and economically, the Journal observed.
The U.S. economy grew faster than China's economy in the final quarter of 2021, growing 5.5% year-on-year compared with China's 4.0%, the first time it had done so in 20 years.
China's annual growth target is 5.5% this year, but China's zero-tolerance approach to Covid-19 is dampening consumer spending and industrial production, and there is fading demand for its exports.
But many economists are skeptical that China can meet the government's 5.5% goal.
"With the 5.5% target, they've set themselves up for some real difficulty," said Mary Lovely, senior fellow at the Peterson Institute for International Economics, who heads the Washington think tank's China studies program, the Journal reported.
The IMF predicts China will grow by 4.4% this year, a more modest expansion that should still outpace growth in the U.S., which will grow 3.7%.