HomeWorldChina's COVID infections hit record as economic outlook darkens

China’s COVID infections hit record as economic outlook darkens

BEIJING, Nov 24 (Reuters) – China reported a record number of COVID-19 infections on Thursday, with cities across the country imposing local lockdowns, mass testing and other restrictions fueling frustration and hurting the outlook for the world’s second-largest economy darkened.

The resurgence of infections nearly three years after the pandemic broke out in the central city of Wuhan casts doubt on investors’ hopes that China will soon relax its rigid zero-COVID policy, despite recent more targeted measures.

The curbs are taking a toll on trapped residents and production at factories, including the world’s largest iPhone factory, which has been rocked by clashes between workers and security personnel in a rare display of dissent.

“How many people have the savings to support them when things are constantly stagnant?” asked a 40-year-old man from Beijing, nicknamed Wang, who is a manager at a foreign company.

“And even if you have money to stay home every day, that’s not real life.”

The streets of Chaoyang, the capital’s most populous district, have become increasingly empty this week.

Sanlitun, an upscale shopping district, was almost silent on Thursday, except for the hum of the e-bikes of delivery drivers bringing meals to home workers.

Brokerage Nomura cut its Q4 GDP forecast from 2.8% to 2.4% year-on-year for China and cut its full-year growth forecast from 2.9% to 2.8%, which is far from below China’s official target of about 5.5%. % this year.

“We believe reopening is likely to still be a lengthy process with high costs,” Nomura wrote, also lowering his forecast for China’s GDP growth for next year from 4.3% to 4.0%.

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China’s leadership is sticking to zero-COVID, a signature policy of President Xi Jinping, even as much of the world tries to co-exist with the virus, saying it is necessary to save lives and prevent the medical system from collapsing. gets overwhelmed.

The cabinet acknowledged the pressure on the economy and said China would cut bank reserves and other monetary policy tools in a timely manner to ensure adequate liquidity, state media said on Wednesday. .

WIDESPREAD OUTBREAKS

Wednesday’s 31,444 new local COVID-19 infections broke an April 13 record, when Shanghai’s commercial center was paralyzed by a citywide lockdown of its 25 million population that was to last two months.

This time, however, the major outbreaks are widespread, with the largest in the southern city of Guangzhou and southwest Chongqing, though hundreds of new infections are reported daily in cities such as Chengdu, Jinan, Lanzhou and Xian.

While official numbers are low by global standards, China is trying to eradicate every chain of infection.

It recently started easing some mass testing and quarantine standards as it aims to avoid sweeping measures such as city-wide lockdowns like the one in Shanghai this year.

Recently, cities have been using more local and often unannounced lockdowns. Many people in Beijing said they had recently received reports of three-day lockdowns on their residential complexes.

The far northeastern city of Harbin announced closures of some areas on Thursday.

Many cities have returned to mass testing, which China had hoped to reduce as costs rise. Others, including Beijing, Shanghai and Sanya on the holiday island of Hainan, have limited movements of recent arrivals.

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Nomura estimates that more than a fifth of China’s GDP is in lockdown, a larger share than the UK economy.

“Shanghai-style full lockdowns can be avoided, but they could be replaced by more frequent partial lockdowns in an increasing number of cities due to rising numbers of COVID cases,” the analysts wrote.

The central city of Zhengzhou, where workers worked at the huge Foxconn (2317.TW) factory that makes iPhones for Apple Inc (AAPL.O) staged protests, announced five days of mass testing in eight districts and became the latest city to revive daily testing for millions of residents.

Reporting by Beijing and Shanghai Editorials; Written by Bernard Orr; Edited by Tony Munroe and Clarence Fernandez

Our standards: The Thomson Reuters Principles of Trust.

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