The Covid Tsunami Is Putting More Stress on China’s Economy
The covid tsunami is putting more stress on china’s economy. While more people stayed home to avoid getting sick or recover from the Covid-19 outbreak, China’s economy continued to slow in December.
Despite an already weak pace in November, Bloomberg’s aggregate index of eight early indicators shows a decline in activity in December.
Despite the fact that there is no reliable data on how widely the virus is spreading or how many sick and dead it has caused, the virus had reached every province before intensive and regular testing ended. It is now possible for the virus to circulate freely as most domestic restrictions have been revoked.
China’s economy is declining
The Chinese economy had already been struggling before the curbs were lifted, with consumer spending collapsing and industrial output growing at the slowest rate in a long time.
In November, retail sales in Beijing dropped almost 18% as both cases and restrictions escalated in both the capital and the rest of the country.
Zero-Covid Destroyed Private Consumption
According to high-frequency data on subway and road usage, even though people are now free to move, movement has not rebounded so far this month.
In Beijing last Thursday, the subway made 3.6 million trips, 70% less than on the same day in 2019, and traffic congestion was 30% less than in January 2021, BloombergNEF reports. Similar declines are being observed in Guangzhou, Tianjin, Chongqing, Shanghai, and Wuhan, are also experiencing similar decreases.
Major onshore stocks: Shanghai or Shenzhen-listed A-share stocks in the CSI 300 index. Total floor space sold in the four Tier-1 Chinese cities. Rebar steel in stock for use as reinforcement in building. Rising demand is indicated by declining inventory.
Home and automobile sales, which declined in the first two weeks of this month, appear to be suffering as a result. Car sales, which last year’s consumer spending was buoyed by government subsidies, started to decline last month as customers started to cut down. As a result, industrial output was negatively impacted. This was the first time as Of may, when numerous plants were forced to close, vehicle manufacturing decreased.
Foreign and domestic sales are declining
The initial excitement witnessed in the stock and commodity exchanges at the opening has been dampened by the virus’s spread throughout China. The Shanghai Composite Index (SCI) has been declining for the previous two weeks and is now back close to the position it was in just before officials began easing restraints on Nov. 11.