China’s economic outlook was already challenging at the start of the year, as President Xi Jinping’s crackdown on real estate and other high-growth industries rippled through the world’s second-largest economy.

But that view has soured ahead of the April 18 release of estimates for first-quarter gross domestic product growth by the National Bureau of Statistics.At the same time, Xi Jinping’s government is grappling with Covid-19 nightmare The situation has swept through some of the country’s largest cities over the past month.

Statistics released on Monday will contain only a fraction of the Shanghai closed cityChina’s most populous city and most important financial and manufacturing center, did not become a full-blown crisis until the end of March.

Previously, large-scale disruptions were concentrated in the northern city of Xi’an, which saw a surge in cases in January, and recently in Jilin province, an important agricultural producer and car center.

The knock-on effects of Shanghai’s lockdown are far greater than those of Xi’an or Jilin, so no matter how bad the first-quarter numbers are, it’s likely to only get worse in the coming months. Here are five things to look out for when it launches on Monday.

How realistic is the government’s official annual growth target of 5.5%?

When Premier Li Keqiang announced 5.5% target At the opening ceremony of China’s annual National People’s Congress on March 5, most analysts saw it as aggressive, especially given his repeated pledge not to resort to “flood stimulus” while “maintaining the [national] The macro leverage ratio is generally stable.”

In the final three months of 2021, Chinese economic output grew by 4% year-on-year, down from 4.9% in the previous quarter.

Xi Jinping’s most trusted financial advisor, Vice Premier Liu He of the State Council bet on your reputation Be disciplined and don’t let debt levels explode like the investment frenzy that Beijing sparked after the 2008-09 global financial crisis.

But both Li and Liu are now clearly worried about the health of the economy.Liu made a rare intervention March to boost confidence in the economy and stock markets, which have been hit by the coronavirus lockdown and inflationary fallout in Russia Invasion of Ukraine.

Will zero Covid-19 politics triumph over economic worries?

China’s success Zero Covid approach Managing the pandemic well in 2020 and 2021 has become a core part of Xi Jinping’s legacy and the reason he is seeking a third term as head of the party, state and military.

Xi Jinping has repeatedly said that local officials should achieve zero outbreaks while ensuring minimal disruption to the economy and people’s lives.Shanghai initially tried to pass half locked Five days for its population, then five days for the other half.

But the compromise approach could not compete with the contagiousness of the Omicron variant. With Shanghai’s daily case count surpassing 20,000, a de facto city-wide lockdown followed, with no clear exit strategy.

Other cities with negligible daily cases are now imposing pre-emptive restrictions and full lockdowns. Ernan Cui of Beijing-based consultancy Gavekal Dragonomics estimates, nearly three-quarters Of China’s 100 largest cities, which account for more than half of the country’s GDP, coronavirus-related restrictions are in place.

Unless Xi Jinping sends a clear signal that the virus-free mania has gone too far, the economy will continue to bear the brunt of its consequences. On Wednesday, Xi Jinping reiterated that he would not ease policy significantly.

How much has consumption been hit?

Lockdowns have made it difficult for people to go out to buy consumer goods, cars and even apartments, with predictable consequences for the economy.

Car sales had been in the doldrums until Shanghai announced a partial lockdown on March 26, and ended the month down nearly 12% from a year earlier. Prospects for a rebound in April are not rosy given the constraints of Shanghai and Jilin, two big auto hubs.

Property sales It also stalled before China’s March lockdown. New home prices fell slightly in February from January, despite measures across the country to boost sales. first knife China’s benchmark mortgage rate since 2020.

Will the government use covert stimulus to boost the economy?

Gross social financing, a broad measure of credit to the Chinese economy, surged 38% year-on-year to 4.65 billion yuan ($730 billion) in March, compared with expectations for an 8% rise.

This is a repeat of March 2020, when total social financing reached RMB 518 million shortly after the outbreak in central China.

Chinese banks also disbursed a total of 3.1 trillion yuan in loans in March, about 2.5 times the February figure.

Is the patience of foreign investors near a tipping point?

This week, Jörg Wuttke, president of the European Chamber of Commerce in China, warned that recurring outbreaks and a harsh response from the authorities were “undermining foreign investors’ confidence in the Chinese market”.

According to a recent survey of German investors in China, half of respondents said their supply chain was “completely disrupted or severely affected”, while a third said their manufacturing operations were similarly hit .

“The Omicron variant,” Wuttke said, “is introducing new challenges that seem insurmountable with the old toolbox of large-scale testing and isolation.”