China has to face economic difficulties while fighting the pandemic with its zero covid strategy. According to SCMP, China reported record numbers of Covid-19 cases, more than a fifth of the country’s gross domestic product (GDP) is now under lockdown – on par with the economic impact of Shanghai’s shutdown in April, according to a new report.
The renewed virus curbs have once again put the spotlight on the delicate balance Beijing is trying to strike between easing its zero-Covid policy to help the economy and reining in new outbreaks across the country.
Some 21.1 percent of China’s total GDP is now under lockdown, up from 9.5 percent a month ago, according to a Nomura report published on Thursday.
Covid-19 cases surged to 31,444 on Wednesday, surpassing the previous high of 29,317 in mid-April, when Shanghai was under a citywide lockdown.
Authorities in megacities Beijing, Shanghai, Guangzhou and Chongqing have all recently tightened restrictions.
The Nomura report estimated that more than 30 percent of the country’s GDP will be under lockdown within the next couple of weeks, while sequential economic growth in the fourth quarter will plummet into negative territory as a result.
Surging Covid-19 cases and the government’s unwavering commitment to its zero-Covid strategy have dashed hopes of a fast reopening.
“As local officials step up mass testing and implement frequent partial lockdowns to stamp out the virus, there has been a broad-based deterioration in mobility and business indicators so far in [the fourth quarter],” Nomura said.
“The contraction in most indicators was even worse than in [the second quarter], when Shanghai and a couple of other cities were under blanket citywide lockdowns.”
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