According to the Shanghai-based financial services company wind informationthe Chinese economy is on the verge of recording its lowest quarterly growth rate in more than two years, as it is characterized by a weak growth rate of about 1.4 percent due to the closures due to the Corona virus.
The weak performance in the second quarter makes it unlikely that China will meet its 5.5 per cent growth target this year.
“Although not as bad as the 6.8 percent contraction in the first three months of 2020, during the initial outbreak of the pandemic, it represents the second slowest quarterly expansion of GDP since 1992, when the data set first became available,” he said. South China Morning Newspaper (SCMP) note.
The SCMP’s Correspondents explained that other than the problem of closure due to the Corona virus Closure Vital ports and manufacturing hubs like Shanghai, and the Chinese economy is shaky as outside investors worry about more shutdowns in the future.
The Chinese government has been imposing lockdowns without warning, so residents don’t flee before the government quarantines entire buildings, regions or cities. Orders for mass testing for the coronavirus are one sign of impending doom. As it happens, only Shanghai Command Two more rounds of group auditions on Tuesday due to a supposed coronavirus outbreak broke out from a karaoke bar.
Chinese leaders, including dictator Xi Jinping, are public assured Foreign investors are safe to “do business in China”, while refusing to roll back the happy “zero-Covid” lockdown policies. scandal arouse Last week when a high-ranking Chinese Communist Party official stated that the coronavirus non-proliferation policies would be in effect for at least five more years.
“If we cannot look at the pandemic scientifically and continue to ignore economic development when formulating control policies… it will be difficult for us to ensure that the ‘darkest hours’ of April and May do not reappear,” analytics firm Anbound told SCMP.
“The whole world is recovering and reopening, and China – as a member of the global village – should not become ‘distant’. Otherwise, we will have ‘self-isolation’ from the global market.”
Other analysts pointed out that China’s emerging swing of shutdown-choked business cycles does not align well with the seasonal cycles of the rest of the world, making it difficult for China to integrate with global markets.
China also has a potential credit crunch and real estate looming, its export markets as well threatened With slowdowns in overseas markets like the US being chased by inflation, some of China’s major industries are Feeling a pinch From the new human rights sanctions, the Russian invasion of Ukraine is causing unrest around the world.
Reuters mentioned On Tuesday, China said it would establish an “infrastructure investment fund” of nearly $75 billion in the third quarter to stimulate the faltering economy. A number of smaller stimulus plans have been announced over the past few weeks.
Sources from Reuters said the new infrastructure plan focuses more on data and high-speed networks than “traditional projects such as highways, railways and airports,” because the return on investment from those projects is much lower. Some government advisers are urging big increases in China’s budget deficit to fund more infrastructure and stimulus spending.
China’s fortunes would improve dramatically if the tariffs imposed during the Trump administration were lifted, a move that is said to be on the table because the Biden administration believes it could help bring down inflation in the United States.
On Monday, US Treasury Secretary Janet Yellen wire With Chinese Vice Premier Liu He on sanctions and tariffs. The Treasury said Yellen brought up China’s “unfair and unmarketable” trade policies during the “candid and objective” discussion, possibly anticipating what kind of concessions Beijing would be asked to make in order to make tariff hikes more politically acceptable for member states. Biden administration.