China’s economy is under severe strain as a wave of Covid cases sweeps across the country.
China’s economy is under severe strain as a wave of Covid cases sweeps across the country.
Since the world’s second largest economy drastically eased its Covid restrictions earlier this month, there has been no clear data on the extent of the virus’ spread on the national level. But several cities and provinces have said they were seeing tens of thousands of new cases per day.
The rapid spread of infection has driven many people indoors and emptied shops and restaurants. Factories and companies are also forced to shut down or cut production because of more workers getting sick.
“The number of people on the streets has dropped off sharply from already subdued levels across the country,” said analysts from Capital Economics in a research note last week. “That will be affecting demand.”
The Chinese economy was already struggling when Beijing abruptly pivoted from its stringent zero-Covid policy. Retail sales had contracted in November because of widespread lockdowns, and unemployment had surged to the highest level in six months.
Top leaders have signaled recently that they would shift focus back to growth next year and have bet on the relaxation of pandemic restrictions to lift the economy.
