AFP / Beijing
China’s zero-COVID policy threatens to derail the country’s economic progress goals, weighed down by supply chain problems, port delays and a Shanghai lockdown, analysts said.
Growth in the world’s second largest economy slowed in the second quarter of 2021 due to problems in the real estate market and regulatory controls in certain sectors, which led leaders to establish a 5.5% increase in Gross Domestic Product for 2022 , the lowest target in decades.
But analysts told AFP that this goal may be difficult to achieve due to confinement orders that are paralyzing production and affecting consumption in several key cities in the country. Experts from twelve financial institutions estimated an average growth of 5% for the whole year and 4.3% in the first quarter, slightly above the 4% registered in the previous quarter.
China’s economy got off to a good start in January and February with less energy constraints, a recovery in domestic demand (…), fiscal stimulus and resilient exports,” explains Gene Ma, China research director for the Institute of International finances. But the surge in coronavirus infections in March and the lockdowns “have severely disrupted supply chains and industrial activities,” he adds.
Automakers this week warned of serious supply chain disruptions and the possibility of a complete halt to production if the Shanghai lockdown continues.
