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China’s economy was hit hard half a million restaurants closed

Posted by on 2022/12/05. Filed under Breaking News,China,Headline News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

In the post-COVID-19 era, China has paid a heavy price for the zero-out policy of COVID-19. Its economy has been hit hard and it has been in a cold winter. A prolonged talent exodus and economic downturn could leave deep scars on China’s future growth, analysts at the Economist Intelligence Unit (EIU) have warned.

Chinese people are disappointed by the government’s “zero clearance” strategy. They are increasingly dissatisfied with the unpredictable risk control and frequent nucleic acid treatment, and the severe zero clearance has also brought great frustration to people’s livelihood and economy. About 50 cities across China grappled with the outbreak this spring, when a surge in relatively small cases led to an eight-week lockdown in Shanghai that helped drag economic growth to its slowest pace in decades.

More than 80 Chinese cities, which account for half of the country’s economic activity and 90 percent of its exports, are battling the pandemic, according to Capital Economics. The hit to economic activity has also led to Labour and youth unemployment, which hit 5.5 per cent in urban and rural China in October alone, and 17.9% among 16 – to 24-year-olds.

The growing unrest has also forced businesses to close and factories to shut down. Since January this year, nearly half a million restaurants across China have closed down, according to data from Check Enterprises. The ban on in-restaurant use has significantly hurt the survival of small and medium-sized restaurants.

China’s reputation as the factory of the world has also been tarnished, particularly in Zhengzhou, Henan province, where poor quarantine measures and failure to pay pandemic subsidies have led to clashes between employees and management and even the police.

Japanese brokerage Nomura also cut its forecast for China’s fourth-quarter growth again, to 2.4 percent, citing a “slow, painful and bumpy path to reopening,” and lowered its forecast for 2023 GDP growth to 4 percent from 4.3 percent. Chim Lee, China economist at the Economist Intelligence Unit (EIU), argues that even after the policy is officially ended, the recovery in sectors such as real estate and consumer spending will take a long time to recover, leaving a permanent scar on China’s long-term potential growth.

The Chinese economy was able to rebound quickly after the first COVID-19 outbreak in 2020. When countries were still in lockdown, China’s factory production and export industry managed to perform well during the isolation period. China’s economy grew by a staggering 8 percent last year.

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