The ruling Communist Party promised on Nov. 11 to reduce
disruptions from its “zero- COVID” strategy by making controls more flexible.
But the latest wave of outbreaks is challenging that, prompting major cities
including Beijing to close off populous districts, shut stores and offices and
order factories to isolate their workforces from outside contact.
On Tuesday, the government reported 28,127 cases were found
over the past 24 hours in areas throughout China, including 25,902 with no
symptoms.
China’s infection numbers are lower than those of the United
States and other major countries. But the ruling party is sticking to “zero
COVID,” which calls for isolating every case, while other governments are
relaxing travel and other controls and trying to live with the virus.
Global stock markets fell Monday as anxiety about China’s
controls added to unease about a Federal Reserve official’s comment last week
that already elevated U.S. interest rates might have to rise further than
forecast to cool surging inflation.
Investors are “worried about falling demand as a result of a
less mobile Chinese economy amid fears there will be more COVID-related
lockdowns,” Fawad Razaqzada of StoneX said in a report.
China is the world’s biggest trader and the top market for
its Asian neighbors. Weakness in consumer or factory demand can hurt global
producers of oil and other raw materials, computer chips and other industrial
components, food and consumer goods. Restrictions that hamper activity at
Chinese ports can disrupt global trade.
Economic growth rebounded to 3.9% over a year earlier in the
three months ending in September, up from the first half’s 2.2%. But activity
already was starting to fall back.
Retail spending shrank by 0.5% from a year earlier in
October, retreating from the previous month’s 2.5% growth as cities re-imposed
anti-virus controls. Imports fell 0.3% in a sign of anemic consumer demand, a
reverse from September’s 6.7% rise.
Chinese exports shrank by 0.7% in October after American and
European consumer demand was depressed by unusually large interest rate
increases by the Fed and other central banks to cool inflation that is at
multi-decade highs.
Guangdong province, an export-oriented manufacturing
powerhouse that is the latest infection hot spot, recorded 9,022 new cases on
Tuesday, or almost one-third of the national total. That included 8,241 without
symptoms.
On Monday, the government of the provincial capital,
Guangzhou, suspended access to its Baiyun district, home to some 3.7 million
people, following outbreaks there.
Guangzhou announced plans last week to build quarantine
facilities for nearly 250,000 people. It said 95,300 people from another
district, Haizhu, were being moved to hospitals or quarantine.
The government of Shijiazhuang, a city of 11 million people
southwest of Beijing, said factories that want to keep operating must impose
“closed-loop management,” the official term for employees living at their
workplaces. That imposes extra costs for food and living space.
Businesspeople and economists see the changes in anti-virus
controls as a step toward eventually lifting controls that isolate China from
the rest of the world. But they say “zero COVID” might stay in place until as
late as the second half of next year.
Entrepreneurs are pessimistic about the outlook despite
government promises of less disruptive anti-virus measures, according to a
survey by Peking University researchers and financial company Ant Group Ltd. It
said a “confidence index” based on responses from 20,180 business owners fell
to its lowest level since early 2021.
The ruling party needs to vaccinate millions of elderly
people before it can lift controls that keep out most foreign visitors,
economists and health experts say.
“We do not think the country is ready yet to open up,” said
Louis Loo of Oxford Economics in a report. “We expect the Chinese authorities
will continue to fine-tune COVID controls over the coming months, moving toward
a broader and more comprehensive reopening later.” -AP