Inhibit Covid measures: China’s growth is slowed down

China’s growth slowed significantly in the second quarter. The background to this is the strict Covid measures in the People’s Republic.

China’s economy is growing much more slowly than recently. According to official figures, the gross domestic product of the world’s second largest economy increased by 0.4 percent in the second quarter – compared to the same period last year. That is less than observers had expected and the lowest growth since the start of the Covid-19 crisis in early 2020. In the first three months of this year, growth was still 4.8 percent year-on-year.

The pandemic continues to have an impact

The fact that economic output has collapsed in the People’s Republic is probably mainly due to the effects of the strict zero-Covid policy in China. In the case of the smallest outbreaks, the authorities proceed with travel restrictions, mass tests and strict curfews. In the economic metropolis of Shanghai, the more than 25 million inhabitants were not allowed to leave their homes in April and May. Numerous factories had to shut down production or stop it altogether, ships were backing up in front of Shanghai’s port and supply chains were disrupted.

Growth targets a long way off because of Omikron

In the meantime, the situation has eased somewhat again. But many fear further restrictions – and thus renewed problems for the economy. The new, even more contagious omicron variants of the corona virus are also spreading in the People’s Republic. Most observers believe that the government’s growth target for this year can no longer be reached. China’s state and party leadership had stipulated that the economy should grow by 5.5 percent for the year as a whole.