China’s economic data was released, and beat downbeat expectations that were based on its stringent lockdowns. According to the numbers, there was a 0.7% rise in industrial production in May over one year ago, which was substantially better than the predicted 0.7% drop experts polled by Reuters had expected. In April, production had been down 2.9% from what it had been the previous April.

There was a 6.7% drop in retail sales in May from a year prior, which showed some recovery from April when the number was 11.1%. Again, it beat expectations after experts had predicted a more steep 7.1% drop in May.

There was a 6.2% increase in fixed asset investment between January and May, which beat the 6% estimate.

China’s National Bureau of Statistics released a statement saying the data “showed a good momentum of recovery” in May, “with negative effects from Covid-19 pandemic gradually overcome and major indicators improved marginally. However, we must be aware that the international environment is to be even more complicated and grim, and the domestic economy is still facing difficulties and challenges for recovery,”

There was a 16.9% year over year increase in exports in May, a significant acceleration, and imports also beat expectations, coming in at 4.1%.

Experts had expected a greater effect from China’s stringent lockdowns in April and May. Both Shanghai and Beijing are presently in the throes of yet another series of lockdowns and testing following a minor reemergence of the virus in the population after the last series of lockdowns were lifted.

Previously Shanghai had locked down in April and May, with only a handful of businesses allowed to operate. It only began to reopen in June.

In May for almost a month, citizens were told to work from home while restaurants were only allowed to operate as takeout or delivery services. In early June restaurants were allowed to resume in-store dining with stringent testing procedures for customers, but schools have delayed resuming in-class instruction.

Consumer spending was impacted by the uncertainty around future earnings. In China’s 31 largest cities, unemployment rates passed 2020 highs, reaching 6.7% in April, the highest seen since 2018, and then going on to rise to 6.9% in May.

Meanwhile 18.4% of young people 16 to 24 were without work in April.

In an interview last week, Francoise Huang, senior economist at Allianz Trade, said, “I think as the restrictions are being eased and we have monetary policy support going forward, the unemployment rate should come down a little considering we’re well above the government target. At the moment my scenario is that we should see some recovery in the second half of the year,. It’s not [a] V-shaped rebound, quick and strong rebound, or post-Covid recovery like we had seen in 2020, because the policy easing is not that strong and external demand is not that strong.”