Businesses including Volkswagen (VW) have scaled back their operations in Shanghai, which is being locked down due to a surge in Covid-19 infections.

The German carmaker partially shuttered its factory in the Chinese city on Thursday, citing supply shortages.

More than a dozen companies have suspended plans to list their shares in the major financial centre.

Economists are concerned that a slow down in Shanghai could affect growth in the world's second largest economy.

On Thursday, official data showed that China's manufacturing and services sectors slowed this month at a faster pace than expected.

The National Bureau of Statistics said its purchasing managers' index (PMI) slipped from 50.2 in February to 49.5 in March.

A reading below 50 represents contraction on the 100-point scale.

PMI data is a summary of market conditions gathered through surveying senior executives in key industries about their expectations for a number of factors including new orders, production and employment.

Late on Wednesday, VW said it would partially close its factory in Shanghai due to "lack [of] parts from suppliers".

The carmaker shut the factory earlier this month, when coronavirus infections were climbing in the city, before restarting production 48 hours later.