Status: 08/30/2022 11:17 a.m
China is reporting more corona infections again and is temporarily closing numerous important companies. This increases concerns about renewed economic damage – which could also be felt in Germany.
Several major Chinese cities have tightened their measures against the spread of the corona virus. In the southern Chinese technology center of Shenzhen, for example, other shops and companies had to close. The world’s largest electronics market, Huaqiangbei, has been closed since the beginning of the week. In the northeast port city of Dalian, which is important for imports of soybeans and iron ore, key districts with a population of around three million have been locked down.
In the port city of Tianjin, 13 million people have to undergo PCR tests. In the run-up to an important Communist Party congress in Hebei province, near the capital Beijing, almost four million people have to stay at home until the end of the week.
For August 29, 1717 domestically transmitted Covid infections were reported. More than 20 provinces, regions and municipalities reported new cases – most in Tibet region, Sichuan province and Qinghai province. Cases also increased in Hong Kong. Government advisers believe the number of infections could rise to 10,000 a day this week. China is the only major economic power in the world to pursue a strict zero-Covid strategy, with individual outbreaks being immediately combated through lockdowns and mass testing.
Yuan continues to depreciate
With the tightening of the measures, there is also growing concern about renewed economic damage. “The financial markets could come under pressure again in the next few weeks,” warned analysts at Nomura. “The downturn could be worse than markets previously anticipated.” The national currency, the yuan, continued to weaken against the US dollar after falling to a two-year low on Monday.
Lockdowns in China can also disrupt the global economy. The economic metropolis of Shanghai, for example, was sent into a week-long, tough corona lockdown in the spring, which exacerbated the global shortage of materials. The German economy is particularly affected by this, as China is by far its most important trading partner. The government in Beijing has already announced increased investment in infrastructure to boost the ailing economy.