WorldCOVID-19: China lockdowns fuel fears of global impact

COVID-19: China lockdowns fuel fears of global impact

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China has detected more than 253,000 cases of coronavirus in the last three weeks and the daily average is increasing, the government said on Tuesday. The data added more pressure on authorities trying to reduce the economic damage by easing controls that confined millions of families to their homes.

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The Communist Party, which rules the country, promised on November 11 to reduce the impact of its “zero COVID” strategy and make the measures more flexible. But a new wave of outbreaks has tested that purpose, and big cities like Beijing have locked down crowded districts, shuttered shops and offices and ordered factories to isolate their workforce from outside contact.

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That has fueled fears that a slowdown in Chinese business activity could undermine still-weak global trade.

The average number of daily cases for the last week was 22,200 positives per day, double that of the previous week, the official China News Service reported, citing the National Office for Disease Prevention and Control.

“Some provinces face the most serious and complex situation in the last three years”said a spokesman for the office, Hu Xiang, at a press conference, according to the CNS.

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The numbers of infections in China they are lower than in the United States and other large countries. However, the government is sticking to its goal of eradicating infections and isolating all cases, while other governments have relaxed restrictions on travel and other activities and are trying to live with the virus.

The government reported on Tuesday 28,127 cases detected in 24 hours across the country, including 25,903 without symptoms. Nearly a third, 9,022, were in Guangdong province, the heart of an export-oriented manufacturing region neighboring Hong Kong.

Global markets fell on Monday amid jitters over controls at China and statements last week by a US Federal Reserve official that interest rates could rise even more than expected to contain rising inflation. The price was uneven on Tuesday.

The investors “they fear a decline in demand as a result of a less mobile Chinese economy amid fears of more COVID-associated lockdowns,” said Fawad Razaqzada of StoneX.

China it is the world’s largest trader and the main market for its Asian neighbors. Weak consumer or factory demand could hurt global producers of oil and other raw materials, computer processors and other industrial components, food and consumer goods. Restrictions limiting activity in Chinese ports may affect global trade.

This file photo taken on November 20, 2022 shows people lining up to be tested for the coronavirus at a swab collection station in Beijing. (Photo: Noel CELIS / AFP) (NOEL CELIS /)

Economic growth picked up to 3.9% year-over-year in the three months ending in September, up from 2.2% in the first half. But activity was already starting to drop again.

Retail spending contracted 0.5% compared to October of the previous year, below the 2.5% growth of the previous month, when several cities resumed controls against infections. Imports fell 0.3% in a sign of subdued consumer demand, a sharp decline from 6.7% growth in September.

For its part, Chinese exports fell by 0.7% in October as demand from US and European consumers fell due to unusually high interest rate increases by the Fed and other central banks, which are trying to curb inflation at record levels for several decades.

Guangdong’s capital, Guangzhou, on Monday suspended access to the Baiyun district, where some 3.7 million people live, after identifying sources of infection there.

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Guangzhou announced plans last week to build quarantine centers for nearly 250,000 people. The city said 95,300 people from another district, Haizhu, would be transferred to hospitals or quarantine centers.

The government of Shijiazhuang, a city of 11 million people southwest of Beijing, said factories that want to keep operating must impose “closed-loop management,” the official term for workers residing at their workplaces. That means additional costs for food and lodging.

Businessmen and economists see the changes in antivirus controls as a step toward lifting the controls that isolate China from the rest of the world. But they claim that the goal of zero COVID it should be maintained until the second half of next year.

Despite government promises of less disruptive measures, businessmen are pessimistic about the outlook, according to a survey by researchers at Peking University and financial firm Ant Group Ltd. The confidence index based on responses from 20,180 business owners fell to its lowest level since the beginning of 2021.

Economists and health experts say the government needs to vaccinate millions of the elderly before lifting the controls that keep most foreign visitors out.

“We do not believe that the country is ready to open yet”said Louis Loo of Oxford Economics in a report. “We hope that the Chinese authorities will continue to fine-tune the controls of COVID-19 in the coming months, moving towards a subsequent broader and general reopening.

Source: Elcomercio

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