The economic data from China for the month of April tells a grim story. But with Shanghai's lockdown set to ease in June and a possible shift to a more balanced policy between controlling the spread of the Covid-19 pandemic and supporting the economy, there are glimmers of hope that the worst may be over - although getting the economy back on track will remain a challenge. Overall, China's economy is estimated to have contracted by around 0.7 per cent in April, year on year. Retail sales were down 11 per cent, and industrial production dropped 2.9 per cent. Car production slumped 44 per cent, property sales plunged 46.6 per cent and export growth was slashed to 4 per cent, from 15 per cent in March.

Although too much should not be made of one month's data, the fact that more than 300 million people are still under some form of lockdown across the country and with business confidence running low, economic growth is bound to take a hit. Most economists agree that the official target of 5.5 per cent for this year is beyond reach. China's authorities have tried to adopt counter-measures, by reducing reserve requirements on banks to encourage lending and cutting mortgage rates. But this has not led to credit growth because with many lockdowns still in place, supply chains under stress and the trajectory of the pandemic uncertain, the demand for loans is low.