Zero-Covid endangers China’s economy

The radical zero-Covid strategy of the Chinese communist regime is taking revenge!

Chinese authorities are shutting down entire cities due to a handful of coronavirus cases, imprison millions of people. Result: completely desperate citizens, and now also a tainted economy!

The Chinese economy started the new year with momentum, growing unexpectedly strong by 4.8 percent in the first quarter. But Jens Hildebrandt, head of the Overseas Chamber of Commerce in Beijing, warns: The growth “so far hardly seems to reflect the war in Ukraine and the ongoing Covid outbreaks in China.”

Consumption in the country is now “worryingly” down.

This year, the Chinese regime is aiming for 5.5 percent growth, but this target is unstable! Max Zenglein of the Mercator Institute for China Studies (MERICS) in Berlin: “After last year’s strong economic recovery, the Chinese economy looks surprisingly fragile. Without a massive stimulus package, the outlook for 2022 looks bleak.”

The radical policy of the crown “will continue to stifle consumption, which is already reeling, for the foreseeable future.” According to Zenglein, inflation in Europe fueled by the Ukraine war also has consequences for China: Because money in countries like Germany is rapidly losing value, they can import less from the Far East. German exporters had to accept a nearly ten percent drop in trade with China in March.

The shaken economy could also become a problem for the head of state and party leader Xi Jinping (68): he wants to be confirmed in office at a party conference in the fall and depends on a well-functioning economy, especially a stable labor market. . Eleven million college graduates will have to find work this year, more than ever.

“A very explosive year politically,” says expert Zenglein: “The Chinese government will have to expand the economic stimulus package and rely more on infrastructure programs and state-owned enterprises to stabilize growth.”

In order to stimulate the economy, the Chinese central bank had already announced on Friday that it would slightly reduce banks’ minimum reserve requirements. This should inject 530 billion yuan (76 billion euros) into the economy in the long run and support businesses.

Bottom: China is currently experiencing the largest corona wave since the pandemic began more than two years ago. There are curfews in the economic metropolis of Shanghai, among others. Millions of people cannot leave their homes.

Experts at Oxford Economics assume that the measures and thus restrictions on China’s economy will continue for weeks.

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