China's economy grew a surprising 4.8 per cent in the first quarter, better than the expected 4.4 per cent, and the 4 per cent of the previous quarter. But the Chinese are not celebrating. With nearly 400 million people in more than 40 cities under some form of lockdown because of a raging Omicron outbreak, there is little to cheer about. What is more, the latest economic figures show that much of the growth increase took place in the first two months of the year - before the current lockdowns began in March. Signs are that things could get worse: retail sales for March fell 3.5 per cent, while industrial production grew only 5 per cent in the same month against 7.5 per cent in January and February. Unemployment rose to 5.8 per cent in March, higher than the government target of 5.5 per cent, with a record number of university graduates set to join the job market in the summer.

Nowhere is the threat to the Chinese economy more ominous than in Shanghai, given the severity of the outbreak and where there have already been more than 400,000 cases since March 1, with a death toll that reached 17 yesterday. The city has been in lockdown since March 28, beginning with a two-stage lockdown that became a full-fledged one from early this month, bringing great hardship to its denizens. But Shanghai is also China's financial hub, the world's largest container port and home to key high-tech industries such as semiconductors and electric vehicles, with economic activity there making up 3.8 per cent of the national GDP. Observers think the knock-on effects of a prolonged lockdown in Shanghai - including severely disrupted supply chains - could cost the country 0.4 point in growth. Already, the International Monetary Fund has revised down its 2022 growth forecast for China from 4.8 per cent to 4.4 per cent.