Status: 11/25/2022 2:26 p.m
The zero-Covid strategy is having a massive impact on China’s economy. Experts estimate that more than a fifth of economic output will be affected. This is also making the German economy nervous.
In the corona wave in China, the number of new infections reached the highest level since the outbreak of the pandemic almost three years ago. As the Health Commission in Beijing announced, 32,695 new cases were reported. The number of daily new infections has more than tripled in two weeks.
Extensive restrictions on movement apply in metropolises such as Beijing, the hard-hit southern Chinese city of Guangzhou or in Chongqing. In the capital, restaurants, shops and schools were closed – only supermarkets and markets were still open for grocery shopping. Employees have to work in the home office. The 21 million Beijingers were asked not to leave their homes if possible.
Another high of new corona cases in China – metropolises are turning into ghost towns
Tamara Anthony, ARD Beijing, daily news at 12:00 p.m., November 25, 2022
New record for new infections
The effects on the world’s second largest economy are enormous: Experts from the Japanese financial group Nomura estimated that a little more than a fifth of Chinese economic output was affected by the lockdown – twice as much as in October, as the Bloomberg financial agency reported.
The previous high of new infections from April was already exceeded yesterday. At that time, the eastern Chinese port metropolis of Shanghai was put into a strict lockdown for two months.
China remains steadfast in its strict zero-Covid strategy. Residential areas are cordoned off in individual cases. Contact persons come to quarantine camps, infected people are isolated in the hospital. Every day there are mass tests that weigh heavily on local government finances. The new omicron variants are blamed for the rapid increase in infections, which spread more easily and thus undermine preventive measures in China.
Lockdown in Zhengzhou
Around the country’s largest iPhone factory in the city of Zhengzhou, where violent protests had recently taken place, a lockdown was imposed on more than six million people yesterday. It is valid from today for an initial period of five days. More than half of the city’s residents have been affected by the lockdown. For the time being, residents of the city center are only allowed to leave the area with a negative corona test and official permission. You are also advised to only leave the house in urgent cases.
concerns in the German economy
The increase in the number of infections and the lockdowns imposed in China are causing concern in the German economy. “China’s adherence to the zero-Covid policy in combination with the excessive lockdowns, even in the case of isolated cases of illness, make the business relations with the Middle Kingdom, which are so important for German trade, more difficult,” said Foreign Trade President Dirk Jandura of the Reuters news agency. For bilateral trade relations and also for world trade, this brings renewed uncertainty in the supply chains and weighs on economic development across the board.
“We still have bad memories of the traffic jams in front of the Chinese ports at the beginning of the year. The consequences were noticeable for many of our wholesalers and foreign traders well into the year,” said the President of the Federal Association of Wholesale, Foreign Trade and Services (BGA).
Despite delays in the supply chains, nobody in Germany has to worry about empty shelves in retail, emphasized the industry association HDE. “The dealers have largely adapted to the challenges, changed delivery routes, found new suppliers and ordered earlier.”
China’s exports and imports are declining
The government in Beijing is targeting gross domestic product (GDP) growth of around 5.5 percent this year. Last year, an increase of 8.1 percent was achieved, as the world export champion benefited from the recovery of the global economy from the Corona crisis.
But although the government has been supporting the economy with numerous measures since the end of May, the rigid zero-Covid policy and the global economic slump have recently slowed down world trading power. In October, for the first time in almost two and a half years, both exports and imports fell – another sign that the once booming economy is getting into trouble.