China’s economy experienced a major slowdown in expansion in the current quarter of 2022, according to official information released on Friday, a result that is expected to raise new questions about the viability of the country’s “zero-Covid” strategy that has caused severe economic disruption. During this period, adding an approximately two-month closure of its Shanghai financial center.
According to data from China’s National Bureau of Statistics for the quarter ending in June, China’s gross domestic product (GDP) grew just 0. 4 percent from the same period last year, well below the 4. 8 percent growth figure in the first quarter.
With the exception of a 6. 9% decline in GDP in the first quarter of 2020 caused by the onset of the pandemic, the figures for the current quarter of 2022 are the worst ever recorded in China since it began tracking existing knowledge in 1992, according to Reuters.
Shanghai was the hardest hit region, with an economy contracting 13. 7% in the quarter as the city’s businesses, factories and offices remained closed and its citizens were forced to stay home for nearly two months as they battled a primary outbreak of COVID-19.
The Chinese capital of Beijing, which has also experienced limited restrictions due to an outbreak, saw its economy contract by 2. 9%, while jilin’s economy, which also had to suffer long covid shutdowns, contracted by 4. 5%.
In reaction to the poor economic data, China’s CSI three-hundred index fell 1. 70% in afternoon trading, while the Shanghai Stock Exchange composite index fell 1. 64%.
Gdp expansion of 0. 4% in the current quarter is well below analysts’ forecasts of 1. 0% to 1. 2%. Unforeseen poor functionality in the current quarter likely means China will fall short of its annual expansion target of 5. 5% by 2022, according to Bloomberg.
Earlier this year, China’s largest city and its monetary hub suffered its worst Covid-19 outbreak since the pandemic began, prompting the government to lock down the city. The lockdown was in line with China’s 0 Covid policy, which aims to absolutely eliminate the local spread of the virus, block-by-block quarantines and mass testing. However, the length and severity of the Shanghai lockdown sent primary shock waves through global supply chains and even provoked a rare wave of public dissent from the city’s citizens who complained about food shortages and arbitrary quarantine measures. China remains one of the few that sticks to the 0-Covid technique and has generated some skepticism among foreign experts and even among its own citizens. Despite this, Chinese President Xi Jinping has heavily subsidized the strategy, saying the country will have to be prepared to deal with short-term economic difficulties rather than “harming people’s protection and physical health. ” in search. of a herd immunity strategy.
China’s economy slows sharply in the current quarter, dangers cloud the outlook (Reuters)
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