The collapse of the Chinese economy: a deflationary effect of the Zero Covid policy
The World Bank concluded in its recent forecast that Beijing’s economy will grow slower than the rest of East Asia this year, as China’s Zero Covid policy has resulted in the closure of businesses in the country. , affecting hundreds of thousands of citizens. Additionally, Russia’s invasion of Ukraine and its impact on energy and food prices and supplies are also weighing on the Chinese economy, the Sydney Morning Herald reported.
China has struggled to spur growth via infrastructure investment and incentives, however, their drastic measures to curb covid via a strict zero covid policy have added to people’s miseries. The World Bank on Tuesday cut China’s economic growth projection for 2022 to 2.8%, pointing to Beijing’s “zero-COVID” policy and housing crisis. Notably, the World Bank forecast economic growth of 5% in April, The Strait Times reported.
China’s Zero Covid policy under which full or partial closures have been imposed in major centres, has had a negative impact on businesses. Tougher lockdowns have been put in place in the country as it has continued to report more coronavirus infections this year. Many people have been unemployed and underemployed, especially in service industries, due to repeated shutdowns in different parts of the country.
The shutdowns affected factory production and supply chains and caused delays in shipping goods to the rest of the world and consumer prices in the country rose 2.5% due to lower Requirement. (ANI) China is one of the last places in the world still enforcing strict zero-Covid measures. The brutal approach has seen dozens of neighborhoods in Shenzhen identified as “high-risk areas” and placed under strict lockdown orders.
Over the past two years, as the rest of the world has seized the opportunity and fought its way through the global health crisis, China has clung to its futile attempt to feign control of a situation. impossible. Videos shared by residents on social media show metal barriers — some topped with barbed wire — erected outside residential buildings, preventing residents from leaving, CNN reported.
However, the endless restrictions have disrupted daily life and dealt a severe blow to the slowing economy. In July, youth unemployment in China hit an all-time high, with one in five young people out of work. (ANI)
(This story has not been edited by the Devdiscourse team and is auto-generated from a syndicated feed.)