China’s economy has hit Omicron because big cities are under lockdown

Fighting the worst coronavirus outbreak since it appeared in Wuhan two years ago, China on Monday acknowledged that its economy had been affected by the Omicron variant, which led to several cities being locked down as data showed the economy had shrunk dramatically in April, experts warned. Given that the fall is still down

China, which prides itself on stamping COVID-19 before it became a worldwide catastrophic epidemic with billions of deaths after its outbreak in December 2019, has struggled to cope with the “Omicron Tsunami” in recent months, with its capital, Shanghai, in addition to the capital Beijing. Including several city lockdowns, which are currently under semi-lockdown.

Officials in Shanghai announced Monday that they would reopen Shanghai, China’s largest city, from June 1, ending a two-month lockdown of more than 25 million people that put the business-industry center on a grinding halt.

The local health commission said Monday that Shanghai has stopped community transmission of COVID-19 in 15 of its 16 districts.
The city on Sunday reported 69 locally infected COVID-19 cases and 869 local asymptomatic cases.

From June 1 to the end of mid-June, Shanghai will fully restore the normal order of production and life throughout the city through epidemic prevention and control measures, where the epidemic will be strictly prevented, Jung Ming, vice mayor told the media.

The city, which witnessed mass protests by the government in response to the crisis, has killed 582 people since March and thousands more have been treated at make-shift hospitals.

Meanwhile, Beijing, which is under a semi-lockdown, began its 3-day third-round trial of 21 million people on Monday as the city was in a semi-lockdown for the third week in a row to break the virus chain.

The lockdowns, meanwhile, have had an impact on China’s economy, which has been plagued by war in Ukraine and trade tensions with the United States and the EU.
China’s economy is expected to recover slowly as the country achieves anti-epidemic results and drives growth, National Bureau of Statistics spokesman Fu Lingzhui said Monday because the second-largest economy has been hit for three months – several cities in the long-term Omicron variant of Kovid are closed. Has done.

The economy is expected to improve in May by accelerating work and production in Shanghai and Jilin, as well as implementing growth measures, Fu was quoted as saying by state media.

According to official data, China’s April industrial output fell 2.9 percent year-on-year, while retail sales fell 11.1 percent as the impact of Omicron Flare-up disruptions on the economy worsened.

This leads to a call for a subtle tune of China’s coronavirus policies, especially the strongly imposed zero-covid policy and increased stimulus as April’s data show that the economy has shrunk dramatically.

Leading indicators measuring China’s economy, industrial production, retail sales, fixed-asset investment and surveyed unemployment rates have fallen short of expectations as they have fallen to their weakest levels in more than two years.

Tommy Wu, chief economist at Oxford Economics in China, said: “China’s economic activity contracted in April and was the worst since the first quarter of 2020 during the first wave of the Kovid outbreak.”

U expects a contraction in the second quarter before returning to growth in the second half of the year.
He told the Hong Kong-based South China Morning Post, “The outlook risks are tending to be negative, as the effectiveness of the policy stimulus will largely depend on the future Covid outbreak and the scale of the lockdown.”

Unemployment surveyed in China, which does not include the country’s millions of migrant workers, rose to 6.1 percent in April, the second highest record in February 2020 at 6.2 percent.

Ding Shuang, chief economist at Greater China and North Asia at Standard Chartered, said the headline figures showed that China’s gross domestic product (GDP) had fallen by almost three per cent since April a year earlier.

China’s economy grew 4.8 percent in the first quarter, falling below the ruling Communist Party’s 5.5 percent target for this year.
Cao Heping, an economist at Peking University, told the state-run Global Times that weak April data reflected the pull caused by the epidemic, which had already been shown in March and became more severe in April.

The impact of the epidemic in Hong Kong and Shanghai, as well as a large spillover, was evident, as China’s two most dynamic economic zones, the Pearl River Delta and the Yangtze River Delta, were affected, Cao said. In May, he said.
Cao said the dual effect meant that the downward pressure that China faced in April was the most serious challenge since the first quarter of 2020, when the COVID-19 outbreak first hit Wuhan in China’s Hubei province.

Leave a Reply

Your email address will not be published.