A sharp slowdown in China’s economy caused by its strict zero COVID rules and Beijing’s move away from a traditional reliance on external demand have cast doubts on the country’s contribution to global trade and investment. future, Reuters mentioned.
While China has rebounded remarkably quickly from its initial pandemic slump, thanks to stellar exports and factory production, analysts expect the current downturn to be more difficult to overcome than that seen in the early 2020, according to the report.
The bleaker outlook presents challenges not only for leaders in Beijing worried about rising unemployment, but also for foreign businesses that are counting on China to resume the level of engagement it had with the rest of the world before the crisis. pandemic, Reuters mentioned.
Calculations based on International Monetary Fund projections show that China’s expected average annual contribution to global economic growth through 2027 is around 29%. While this is a considerable addition, it contrasts with the years following the 2008 global financial crisis, when this average was closer to 40%, according to the report.
Shanghai reaffirmed last week that it would maintain the “zero-COVID” approach to eliminating a declining epidemic in China’s largest city after the head of the World Health Organization said it would not. was not sustainable and urged China to change its strategy.
Although progress has been made, the relaxation of prevention and control measures could allow the virus to rebound, deputy director of the Shanghai Center for Disease Control Wu Huanyu told reporters.
Lockdowns hit global supply chains
Supplies of Adidas sneakers and Bang & Olufsen speakers were affected. Automakers from Toyota to Tesla face ‘unprecedented’ production costs and hurdles, says Bloomberg. Sony is struggling to make enough PlayStations.
Shanghai will gradually reopen by June 1
The Chinese city of Shanghai has announced plans to gradually reopen after spending more than six weeks in lockdown and eradicating COVID-19 transmission in 15 of its 16 districts.
The opening will take place in phases, state media reported on Monday, with city officials saying “normal life” will resume on June 1.
Most of Shanghai has halted the spread of the coronavirus in the community and less than a million people remain under strict lockdown, authorities said on Monday, as the city moves towards reopening and economic data showed the grim impact of China’s “zero-COVID” policy.
China’s export growth hits two-year low
Recession worries swirl again as China’s COVID-19 lockdowns, war in Ukraine and cost of living crisis all threaten global recovery, The Guardian reported.
China’s export growth slumped to its lowest level in two years as restrictions introduced to combat COVID hit factory production, disrupted supply chains and weakened domestic demand as well. The Guardian reported.
Exports slowed to 3.9% year-on-year in April, the weakest since June 2020. Import growth remained flat (and imports from the United States fell 1.2%) as cities like Shanghai have been shut down to fight virus outbreaks.
Data from April shows the impact of China’s latest COVID restrictions, including the strict lockdown in Shanghai that lasted six weeks, disrupting the operations of companies such as Tesla and Apple.
April exports to sanctions-hit Russia plunge, imports rise
Chinese exports to Russia fell in April for the second month as China’s northern neighbor grappled with economic sanctions, while Russian shipments to China increased, a balm for hard-hit Russian businesses facing international economic isolation.
Shipments to Russia fell 25.9% in April from a year earlier in dollar terms, after falling 7.7% the previous month, according to Reuters calculations based on customs data on Monday. Imports from Russia, however, jumped 56.6% in April, compared to a 26.4% increase in March.
Omicron wave forces China to postpone Asian Games in Hangzhou
This year’s Asian Games due to be held in Hangzhou in September are set to be postponed, Chinese state media reported.
The move comes as China recently battles the COVID-19 outbreak. Speaking to China Central Television, an official confirmed that the date would change. Many events in China have been delayed due to a medical emergency.
The decision was made following an agreement between the Chinese Olympic Committee (COC) and the Hangzhou Asian Games Organizing Committee (HAGOC), the Executive Board (EC) of the Olympic Council of Asia (OCA) .
(With contributions from Reuters, agencies)
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Posted: Thursday May 19th 2022, 12:03 IST