China’s COVID infections hit record high as economic outlook darkens

BEIJING, Nov 24 (Reuters) – China reported a record number of COVID-19 infections on Thursday, with cities across the country imposing localized lockdowns, mass testing and other restrictions that are fueling frustration and clouding the outlook of the world’s second largest economy.

The resurgence of infections, nearly three years after the pandemic emerged in the central city of Wuhan, casts doubt on investors’ hopes that China will soon ease its rigid zero-COVID policy, despite recent more targeted measures. .

The restrictions are weighing on locked-down residents as well as production at factories, including the world’s largest iPhone factory, which has been rocked by clashes between workers and security personnel in a rare show of dissent.

“How many people have the savings to support themselves if things remain continuously at a standstill?” asked a 40-year-old Beijinger named Wang, a director of a foreign company.

“And even if you have money to stay home every day, that’s not real life.”

The streets of Chaoyang, the most populated district of the capital, are increasingly empty this week.

Sanlitun, an upscale shopping area, was nearly silent on Thursday except for the roar of electric bikes of delivery people carrying meals for those working from home.

Brokerage Nomura cut its forecast for China’s GDP for the fourth quarter to 2.4% yoy from 2.8%, and cut its growth forecast for the full year to 2.8% from 2, 9%, which is well below China’s official target of around 5.5. % This year.

“We believe reopening is likely to be a protracted process with high costs,” Nomura wrote, also lowering its Chinese GDP growth forecast for next year to 4.0% from 4.3%.

Chinese leaders have stuck to zero-COVID, a flagship policy of President Xi Jinping, even as much of the world tries to coexist with the virus, saying it is necessary to save lives and prevent the spread. medical system from being overwhelmed.

Acknowledging the strain on the economy, the cabinet said China would use timely reductions in banks’ cash reserves and other monetary policy tools to ensure sufficient liquidity, state media said on Wednesday, hinting that a reduction in the required reserve ratio (RRR) could soon be coming. .

GENERAL EPIDEMICS

Wednesday’s 31,444 new local COVID-19 infections broke a record set on April 13, when Shanghai’s mall was crippled by a citywide lockdown of its 25 million people that would last two month.

This time, however, the major outbreaks are far away, with the largest in the southern city of Guangzhou and southwestern Chongqing, although hundreds of new infections are being reported daily in cities including Chengdu, Jinan, Lanzhou and Xian. .

While the official number of cases is low by global standards, China is trying to eradicate every chain of infection.

It has recently started easing some standards on mass testing and quarantine as it seeks to avoid catch-all measures such as city-wide lockdowns, like the one in Shanghai this year.

Recently, cities have used more localized and often unannounced lockdowns. Many people in Beijing said they had recently received notices of three-day closures of their housing compounds.

The far northeast city of Harbin announced the lockdown of some areas on Thursday.

Many cities have returned to mass testing, which China hoped to reduce as costs rose. Others, including Beijing, Shanghai and Sanya on the tourist island of Hainan, have limited the movements of recent arrivals.

Nomura estimates that more than a fifth of China’s GDP is stuck, a larger share than the UK economy.

“Shanghai-style full lockdowns could be avoided, but they could be replaced by more frequent partial lockdowns in an increasing number of cities due to rising numbers of COVID cases,” its analysts wrote.

The central city of Zhengzhou, where workers at the massive Foxconn factory (2317.TW) that makes iPhones for Apple Inc (AAPL.O) staged protests, announced five days of mass testing in eight districts, becoming the latest city to relaunch daily testing for millions of residents.

Reporting from Beijing and Shanghai newsrooms; Written by Bernard Orr; Editing by Tony Munroe and Clarence Fernandez

Our standards: The Thomson Reuters Trust Principles.

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