China’s COVID infections hit record as economic outlook darkens

  • China has a very good record dating back to the April explosion in Shanghai
  • Cabinet warns of cut in reservation ratio (RRR)
  • Nomura cuts China GDP targets as lockdown spreads
  • Chinese shares fall, global stocks slightly higher

BEIJING, Nov 24 (Reuters) – China reported a new outbreak of the new coronavirus on Thursday, with cities across the country shuttering their doors, mass testing and other measures that are fueling despair and halting hopes for the world’s second-largest economy.

The resurgence of infections, nearly three years after the outbreak began in the central province of Wuhan, casts doubt on business prospects that China will soon end its strict zero-covid-19 policy, despite the latest measures.

The cutbacks are straining the workforce and output at factories, including the world’s largest iPhone plant, which has been rocked by clashes between workers and security officials in a show of dissent.

“How many people have money to support them if things are constantly being put on hold?” asked a 40-year-old man from Beijing named Wang who is a manager at a foreign company.

“And even if you had the money to stay home every day, that’s not true.”

The streets of Chaoyang, a densely populated district in the capital, have been deserted this week.

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Sanlitun, an upscale shopping mall, was quiet on Thursday but for the clatter of bicycles by commuters carrying food to those who work from home.

Brokerage Nomura cut its GDP forecast for China in the fourth quarter to 2.4% year-on-year from 2.8%, and lowered its full-year growth forecast to 2.8% from 2.9%, which is lower than China’s target of about 5.5% this year.

“We believe that the reopening would be a long-term process with more investment,” Nomura wrote, also lowering its forecast for China’s GDP growth next year to 4.0% from 4.3%.

The Chinese leadership has pursued zero-COVID, the signature policy of President Xi Jinping, even as the rest of the world tries to contain the virus, saying it is important to save lives and prevent medical procedures from running out.

Acknowledging economic pressure, the minister said China will use timely bank deposits and other monetary instruments to ensure liquidity, state media said on Wednesday, hinting that a reduction in interest rates (RRR) could come soon. .

Chinese stocks fell on Thursday, as concerns over the daily increase in COVID-19 cases overshadowed optimism from the new economy, and missed global inflation by up to two months.

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Epidemic prevention workers wearing protective suits sit in a closed building as the outbreak of the novel coronavirus disease (COVID-19) continues in Beijing, November 23, 2022. REUTERS/Thomas Peter

GOOD FUN, DELICIOUS

On Wednesday, 31,444 new cases of COVID-19 broke the record set on April 13, when the commercial center of Shanghai was crippled by the closure of the entire city of 25 million people that lasted for two months.

This time, however, major outbreaks are common, with the largest in the southern city of Guangzhou and southwestern Chongqing, although hundreds of new cases are reported daily in cities such as Chengdu, Jinan, Lanzhou and Xian.

Nomura estimates that more than a fifth of China’s GDP is locked up, a share larger than Britain’s economy.

“Shanghai-style lockdowns can be avoided, but they can be replaced by partial lockdowns in cities that are rising due to the high number of COVID cases,” its experts wrote.

Although the number of confirmed cases is low by international standards, China is trying to eradicate any disease, a major challenge as China faces its first winter of fighting the highly contagious Omicron strain.

China has recently begun to loosen some measures on mass testing and isolation, as it looks to avoid measures such as city-wide lockdowns.

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Instead, cities have been using lockdowns widely and often unannounced. Many people in Beijing said they had recently received notices of a three-day lockdown of their homes.

The remote northeastern city of Harbin announced a partial lockdown on Thursday.

Many cities have returned to mass testing, which China had hoped would reduce costs as costs rise. Others, including Beijing, Shanghai and the city of Sanya on Hainan Island, have limited routes for recent arrivals.

The central city of Zhengzhou, where workers at the giant Foxconn ( 2317.TW ) factory that makes Apple Inc’s ( AAPL.O ) iPhones staged a strike, announced five days of mass testing in eight districts, the latest to resume daily testing. and day. million inhabitants.

A sharper-than-expected slowdown in China, which is hurting domestic demand in particular, could reverberate across countries including Japan, South Korea and Australia, which export hundreds of billions of dollars worth of goods and services to the world’s second-largest economy.

Newsroom reports from Beijing and Shanghai; By Bernard Orr; Edited by Tony Munroe, Clarence Fernandez and Raissa Kasolowsky

Our Standards: Thomson Reuters Trust Principles.

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