HomeWorld NewsChina's anti-virus restrictions raise fears of global economic impact

China’s anti-virus restrictions raise fears of global economic impact


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More than 253,000 coronavirus cases have been found in China in the past three weeks and the daily average is rising, the government said Tuesday, increasing pressure on officials trying to reduce the economic damage by easing controls confining Millions of people to their homes. houses

The ruling Communist Party promised earlier this month to reduce disruptions to its “zero-COVID” strategy by easing controls. But the latest wave of outbreaks is challenging that, prompting major cities including Beijing to lock down crowded districts, shutter shops and offices and order factories to isolate their workforce from outside contact.

That has fueled fears that a slowdown in Chinese business activity could hurt already weak global trade.

Last week’s average of 22,200 daily cases is double the rate of the previous week, China’s official News Service reported, citing the National Office for Disease Prevention and Control.

“Some provinces are facing the most serious and complex situation in the last three years,” a spokesman for the office, Hu Xiang, said at a press conference, according to CNS.

China’s infection numbers are lower than those of the United States and other major countries. But the ruling party is sticking to “covid zero,” which calls for isolating all cases, while other governments relax travel and other controls and try to live with the virus.

On Tuesday, the government reported 28,127 cases found in the last 24 hours, including 25,902 without symptoms. Nearly a third, or 9,022, were in Guangdong province, the export-oriented manufacturing heartland adjacent to Hong Kong.

Global stock markets fell on Monday as anxiety over China controls compounded concerns over a Federal Reserve official’s comment last week that already high US interest rates may have to rise more than expected to cool rising inflation. Stocks were mixed on Tuesday.

Investors are “worried about falling demand as a result of a less mobile Chinese economy amid fears of more COVID-related lockdowns,” StoneX’s Fawad Razaqzada said in a report.

China is the world’s largest trader and the main market for its Asian neighbors. Weak consumer or factory demand may hurt global producers of oil and other raw materials, computer chips and other industrial components, food and consumer goods. Restrictions hampering activity at Chinese ports can disrupt global trade.

Hu, the government spokesman, said officials were traveling across China and holding video meetings to ensure compliance with a list of 20 changes to anti-virus controls announced on November 11.

They include shortening quarantines for people arriving in China from seven to five days and narrowing the definition of who counts as a close contact of an infected person.

Despite that, the capital of Guangdong province, Guangzhou, on Monday suspended access to its Baiyun district of 3.7 million people. Residents of some areas of Shijiazhuang, a city of 11 million southwest of Beijing, have been told to stay home while mass testing is underway.

Economic growth rebounded to 3.9 percent from a year earlier in the three months ending in September, from 2.2 percent in the first half. But activity was already beginning to recede.

Retail spending fell 0.5 percent from a year earlier in October, pulling back from 2.5 percent growth the previous month as cities reimposed virus checks.

Imports fell 0.3 percent in a sign of anemic consumer demand, the opposite of September’s 6.7 percent rise.
Chinese exports contracted 0.7% in October after US and European consumer demand was depressed by unusually large interest rate hikes by the Fed and other central banks to cool rising inflation. at multi-decade highs.

Businessmen and economists see the changes in antivirus controls as a step toward lifting controls that isolate China from the rest of the world. But they say “zero COVID” could stay in place until the second half of next year.

Guangzhou announced plans last week to build quarantine facilities for nearly 250,000 people. He said 95,300 people from another district, Haizhu, were being transferred to hospitals or quarantined.

Factories in Shijiazhuang were told to operate under “closed-loop management,” a term for employees who live in their workplaces. That adds costs for food and living space.

Entrepreneurs are pessimistic about the current quarter, according to a survey by Peking University researchers and a financial firm, Ant Group Ltd. It said a “confidence index” based on responses from 20,180 business owners fell to their level. lowest since early 2021.

The ruling party needs to vaccinate millions of older people before it can lift controls that exclude most foreign visitors, say economists and health experts.

“We don’t think the country is ready to open up yet,” Louis Loo of Oxford Economics said in a report. “We expect the Chinese authorities to continue tightening COVID controls in the coming months, moving towards a broader and more comprehensive reopening later.”


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