Companies like Volkswagen (VW) have scaled back operations in Shanghai, which is in lockdown due to a surge in Covid-19 infections.
The German carmaker partially closed its plant in the Chinese city on Thursday due to supply bottlenecks.
More than a dozen companies have suspended plans to list their shares on the major financial hub.
Economists fear a slowdown in Shanghai could hurt growth in the world’s second largest economy.
On Thursday, official data showed that China’s manufacturing and service sectors have slowed faster-than-expected this month.
The National Bureau of Statistics said its purchasing managers’ index (PMI) fell to 49.5 in March from 50.2 in February.
A reading below 50 means a contraction on the 100-point scale.
PMI data is a summary of market conditions collected by surveying executives in key industries about their expectations across a range of factors including new orders, manufacturing and employment.
Late Wednesday, VW said it would partially close its Shanghai plant due to “shortages.” [of] parts from suppliers”.
The automaker closed the factory earlier this month as coronavirus infections rose in the city, before resuming production 48 hours later.
Earlier this month, a VW spokesman said: “What we have lost in production so far can be recovered, [for example] about extra shifts as soon as the situation calms down.”
VW did not say how long the final shutdown was expected to last and did not immediately respond to a BBC request for further comment.
Its factory in the northeastern city of Changchun has been closed for several weeks.
Meanwhile, more than a dozen companies have postponed plans to sell shares on the technology-focused STAR market in Shanghai.
The STAR market has been described as China’s answer to the Nasdaq trading platform in New York.
The plans, revealed in filings to the stock market, involve more than $9bn (£6.9bn) in fundraising, Reuters reported.
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Iris Pang, chief economist for Greater China at ING, said the weaker economic data “reflects the impact of the Covid mass testing lockdowns on production, order intake and delivery times”.
“These numbers undoubtedly reflect some uncertainty – mainly around supply chains,” she said. “But we’re a little more optimistic than the market in general.”
Ultimately, however, the lockdowns in Shanghai and other Chinese cities may have “little impact” on production, said Tao Wang, UBS’s chief China economist.
She said in a research note that most factories continued to operate by keeping workers at the factories or moving production to unaffected areas.
However, she added that “Logistics delays and port congestion in Shenzhen may have had a temporary impact on trade, particularly China’s imports of semiconductor components via the Shenzhen-Hong Kong route.”
The Shanghai lockdown is the largest in China since the coronavirus outbreak began.
So far, Chinese authorities have resisted sealing off the city of nearly 25 million people to avoid destabilizing the world’s largest economy.
It has been fighting a new wave of infections for almost a month, although the number of cases is not high by international standards.
Authorities have closed the east side of Shanghai, which includes the city’s financial hub, to Covid testing.
The west side of Shanghai is scheduled to be closed on Friday.
This phased approach means half of the city can remain open.
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