China’s COVID infections hit record as economic outlook darkens

BEIJING, Nov 24 (Reuters) – China reported a record number of COVID-19 infections on Thursday, with cities across the country imposing lockdowns, mass testing and other curbs that are fueling frustration and darkening the outlook for the country’s second-largest economy. the world

The resurgence of the infection, nearly three years after the pandemic emerged in the central city of Wuhan, has cast doubt on investors’ hopes that China will soon ease its strict zero-covid-19 policy, despite the latest, more targeted measures.

The sidewalks are taking a heavy toll on locked-out residents as well as production at factories, including the world’s largest iPhone factory, which has been rocked by clashes between workers and security personnel in a rare show of dissent.

“How many people have the savings to support them if things continue to stand still?” asked a 40-year-old Beijing man named Wang who is a manager of a foreign company.

“And even if you have money to stay at home every day, that’s not real life.”

Chaoyang Street, the capital’s most populous district, has been increasingly empty this week.

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Sanlitun, a high-end shopping area, was almost silent on Thursday, but for the vibration of the electric bicycles of delivery passengers transporting food for people working at home.

Brokerage Nomura cut its China GDP forecast for the fourth quarter to 2.4% year-on-year from 2.8%, and cut its forecast for full-year growth to 2.8% from 2.9%, which is well short of China’s official target. approximately 5.5. % this year.

“We believe re-opening is still likely to be a prolonged process with high costs,” Nomura wrote, also lowering its China GDP growth forecast for next year to 4.0% from 4.3%.

China’s leadership is sticking to zero-COVID, a signature policy of President Xi Jinping, as much of the world tries to co-exist with the virus, saying it is necessary to save lives and prevent the medical system from being overwhelmed.

Recognizing the pressure on the economy, the cabinet said that China would use timely cuts in bank cash reserves and other monetary policy tools to ensure sufficient liquidity, state media said on Wednesday, a hint that a cut in the reserve requirement ratio (RRR) may come soon. .

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31,444 new local COVID-19 infections on Wednesday broke a record set on April 13, when Shanghai’s commercial center was paralyzed by a city-wide lockdown of its 25 million residents that would last two months.

This time, however, the major outbreaks are far away, with the largest in the southern city of Guangzhou and southwestern Chongqing, although hundreds of new infections are reported every day in cities such as Chengdu, Jinan, Lanzhou and Xian.

While the number of official cases is low by global standards, China is trying to eliminate every chain of infection.

Recently, it began to loosen some norms on mass testing and quarantine, because it seems to avoid all measures such as closing the whole city as in Shanghai this year.

Recently, cities have resorted to more localized and often unannounced lockdowns. Many people in Beijing said they had just received notice of the three-day closure of their housing compounds.

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The far northeastern city of Harbin announced the closure of some areas on Thursday.

Many cities have returned to mass testing, which China had hoped to cut as costs rise. Others, including Beijing, Shanghai and Sanya on the resort island of Hainan have limited movement in recent arrivals.

Nomura estimates that more than a fifth of China’s GDP is closed, a larger share than the British economy.

“Full Shanghai-style lockdowns may be avoided, but could be replaced by more frequent partial lockdowns in a growing number of cities due to high numbers of COVID cases,” its analysts wrote.

The central city of Zhengzhou, where workers at the giant Foxconn ( 2317.TW ) factory that makes iPhones for Apple Inc ( AAPL.O ) staged protests, announced five days of mass testing in eight districts, becoming the latest city to resume testing. everyday. for millions of residents.

Report by Beijing and Shanghai newsroom; Written by Bernard Orr; Edited by Tony Munroe and Clarence Fernandez

Our Standards: The Thomson Reuters Trust Principles.


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