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China's economy has been left in tatters after officials enforced lockdowns to address a surge of coronavirus cases, also putting into stasis a fifth of the country's GDP.
China's economy is in tatters after officials ordered lockdowns in various regions across the nation to address a surge of COVID-19 cases, even amid rising discontent among the public regarding health protocols.
Officials on Thursday reported a record number of daily coronavirus infections as the continuous implementation of the zero-tolerance approach caused citizens to be discontent. On Wednesday, the National Health Commission (NHC) recorded 31,444 locally transmitted cases.
China's Economy
This was more than the previous peak of 29,317 that was recorded on Apr. 13, during Shanghai's lockdown that lasted for several months. The surge of infections is most likely being fueled by outbreaks in multiple cities and comes despite a refusal by authorities to end tight infection protocols.
More and more people have criticized the approach of incessant lockdowns, quarantines, and mass testing mandates. On the other hand, a small number of fatalities from COVID-19 added further pressure to the situation, as per CNN.
On Wednesday, Beijing recorded its fourth COVID-related death since last weekend and 1,648 local infections, marking the third consecutive day of having more than 1,000 local cases. City officials said on Thursday that they were converting a major exhibition center into a makeshift hospital for the quarantine and treatment of coronavirus patients.
It was only the latest sign of China's capital increasing its attempts to control the spread of the virus. Schools in several districts moved classes to an online setting earlier this week. The decision came while Chaoyang, the epicenter of the city's outbreak, urged residents to stay at home and closed down restaurants, gyms, and beauty salons.
According to the South China Morning Post, the lockdowns have forced more than a fifth of the Asian nation's gross domestic product (GDP) to be under stasis. Based on a report on Thursday, some 21.1% of China's total GDP is now under lockdown, which is an increase from 9.5% a month ago.
COVID-19 Situation
The Nomura report estimated that more than 30% of China's GDP will remain under lockdown for the next couple of weeks. The situation comes as sequential economic growth in the fourth quarter is set to plummet into negative territory as a result.
Furthermore, surging coronavirus infections and the Chinese government's steadfast commitment to its zero-COVID strategy have squashed hopes of a quick reopening. Nomura said broad-based deterioration in mobility and business indicators was a result of local officials stepping up mass testing and implementing frequent partial lockdowns.
Beijing also released 20 measures earlier this month in an attempt to boost market confidence, which includes easing rules on inbound travel. Furthermore, officials also urged local authorities to restrain the use of lockdowns.
China's continued and stringent COVID protocols have put pressure on sentiment and business activity. While national GDP grew during the second quarter, it was only marginal due to the Shanghai lockdowns. Furthermore, at the end of the third quarter, growth for the year was up only 3% compared to last year, well below the country's official target of 5.5% announced in March, CNBC reported.
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