Hundreds of thousands of coronavirus cases and more quarantines in China – another bad news for the global economy

China has taken over more than 253,000 coronavirus cases in the past three weeks and the daily average is rising, the government said on Tuesday. The data adds further pressure to authorities trying to do so reduce economic damage easing the controls that confined millions of families to their homes.

The ruling Communist Party promised on November 11 to reduce the impact of its “zero COVID” strategy and make measures more flexible. But a new wave of outbreaks has tested that purpose, and major cities like Beijing have locked down busy neighborhoods, closed shops and offices and ordered factories to isolate their workforces from outside contacts.

This fueled fears that a slowdown in Chinese economic activity could occur undermine a still weakened global trade.

Global jitters about a new outbreak of COVID in China

The average number of daily cases for the last week was 22,200 daily positivestwice as many as 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 of the last three years” an office spokesman, Hu Xiang, told a news conference, according to the CNS.

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

Government 28,127 cases detected in 24 hours reported on Tuesday nationwide, of which 25,903 without symptoms. Nearly a third, 9,022, were in Guangdong province, the heart of an export-oriented manufacturing region close to Hong Kong.

Global markets fell on Monday amid jitters about controls in China and remarks last week by a US Federal Reserve official that interest rates could rise more than expected to contain rising inflation. The price was erratic on Tuesday.

Investors “fear a decline in demand as result of a less mobile Chinese economy amid fears that there will be more COVID-related lockdowns,” said StoneX’s Fawad Razaqzada.

China is the world’s largest trader and the main market of 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 can affect global trade.

Economic growth rose to 3.9% year-on-year in the three months ending in September, compared to 2.2% in the first half. But activity was already starting to drop again.

The retail spending contracted by 0.5% Compared to October of the previous year, below the 2.5% growth of the previous month, when several cities resumed checks against infections. Imports fell 0.3% on subdued consumer demand, a sharp decline from September’s 6.7% growth.

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

Guangdong’s capital Guangzhou suspended access to Baiyun District on Monday, where about 3.7 million people liveafter identifying sources of contagion in the place.

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 centres.

The government of Shijiazhuang, a city of 11 million people southwest of Beijing, said factories that want to continue operating must impose a “closed loop management”, the official term for employees to reside in their workplaces. This means additional costs for food and lodging.

Pessimism among businessmen

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

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

Economists and health experts say the government must do this vaccinate millions of elderly people before lifting the checks that keep most foreign visitors out.

“We don’t think the country is ready for opening up yet,” Louis Loo of Oxford Economics said in a report. “We expect Chinese authorities to continue to refine COVID controls over the coming months, moving towards a subsequent wider and more general reopening“.

By Joe McDonald – The Associated Press

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