China’s economic data on the price of the Zero Govt strategy

BEIJING – Faced with an even worse Kovit-19 eruption, China is enforcing expanding mass isolation, tight locks and border controls. These measures may still work, but official data released on Monday show a tough figure on the world’s second-largest economy.

China’s economy expanded 4.8 percent in the first three months of this year compared to the same period last year. That pace was much faster than the final three months of last year, and it hid a problem.

Most of that growth was recorded in January and February. Last month, economic activity slowed as the technology hub of Shenzhen in the south and then the country’s largest city, Shanghai, and other major industrial centers closed. Lockdowns twisted assembly lines, landing workers, stranded truck drivers and ports. They shut down hundreds of millions of consumers at home.

Retail sales, a key indicator of whether consumers are spending, fell 3.5 percent in March from a year earlier, the National Statistics Office said Monday. Industrial production grew by 5 percent, which was slower than the pace recorded in the first two months. Imports, which had advanced in the first two months of the year, fell somewhat last month, partly due to traffic congestion.

The recession, which began in March, is expected to worsen this month, with more areas under control. This is bad news for China’s leaders who have set a target of “about 5.5” Percentage “ Annual growth.

Prime Minister Lee Hsien Loong called for a “sense of urgency” a week ago, telling local officials to limit the impact of the Govt strikes on the economy. Central Bank of China Activated Friday Commercial banks should help provide more credit to stimulate economic growth.

Globally, China’s govt strikes could feed inflation by further disrupting the supply chain on which many manufacturers depend, and increase the cost of producing and transporting goods. A sluggish China will import less from other countries natural resources Consumer goods such as oil and iron ore or cherry or designer handbags.

See also  Heidi Klum reveals her 2023 Halloween costume, a giant peacock

“When talking about the impact of the epidemics on Shanghai and Shenzhen, we must not forget that they are important parts of the entire supply chain, and this will certainly have an impact on the entire circle of the entire Chinese economy,” Yao Jingyuan said. The former chief economist of the National Bureau of Statistics, who is now a cabinet adviser, told a news conference last Wednesday.

Executives in China’s two largest employers, the automotive industry and technology sector, in particular, have recently begun warning that nationwide operations could be hampered if Shanghai does not reopen soon. The city manufactures many high-tech components that are important to many supply chains.

“Shanghai is the hub of international car companies – if the hub fails, the whole system will not work,” said Qi Dongshu, general secretary of the Chinese Passenger Car Association.

As of April 11, 87 of China’s 100 major cities had imposed some form of restriction, according to the independent economic research firm Kavegal Dragonomics. From controlling who can enter or leave a city like in Shanghai to complete locking, most residents are not even allowed to leave their homes to buy food.

Yang Dekong, manager of a factory that makes plastic molding machines in Zhangjiagong, 70 miles from Shanghai, was forced to suspend operations following the closure of his city on Wednesday.

Prior to the lockdown, authorities had imposed restrictions on the movement of trucks. This means Mr. Yangal was unable to obtain the components to build its machines in a timely manner and was unable to deliver the finished equipment in a locked condition to many factories and ports.

Mr. Yang said he did not know when it would reopen. “Zhangjiagong is under a lot of pressure,” he said. “I worry about the losses, but there is no other way.”

But while more cities are imposing locks – Taiwan, China’s coal hub, joined the list last Thursday – the severity of the municipal locks has weakened somewhat recently. From the end of March to last Wednesday, the number of major cities with severe locks dropped from 14 to six, according to Kavegal. The share of China’s economic output represented by these cities has shrunk from 14 percent to 8 percent.

See also  Jon Stewart grilled Biden and Trump as host of 'The Daily Show'

Beijing has ordered local governments to help trucks achieve their goals and take other measures to protect the economy from damage during locks. Nio, an electric car maker in Hefei in central China, stopped car assembly on April 9th. Hefei was not locked up, but important spare suppliers were in Shanghai, Jilin and elsewhere. However, as of last Thursday, the company had secured enough car parts to resume limited production.

Many workers are struggling. Truck drivers, for example, face the constant risk of weekly isolation, for which they are often not paid even when interest payments on their trucks continue to fall.

Yu Yao, a truck driver who delivers vegetables and fruits from Shandong Province to Shanghai, is one of many Chinese truck drivers who have always been plagued by tight epidemic control measures. He has been trapped in Shanghai for more than three weeks.

On March 16, Mr. to deliver vegetables to market. Yu came to Shanghai. Three days later he was still in the city when authorities identified him as a close associate of the victim in the market. Police ordered his immediate isolation. So he parked his truck near the highway and started waiting.

See also  How the Cubs Hired Craig Council and Shocked the Baseball World

Has been waiting ever since. No one brought him in for isolation. He no longer has a travel permit to drive a truck in Shanghai during the lockout. He and four other drivers without licenses slept on the ground and shared bread for three weeks.

“We can not get off the highway, every exit is protected. We want to go home,” Mr. Yu said. “Another day I could not get enough food and my body could not take it.”

Part of China’s economy remained in the barrel for the first three months of this year: Exports. During the epidemic, Chinese factories accounted for a significant share of global markets, with exports up 14.7 percent in March from a year earlier. Many multinational companies continue to rely on large networks of spare parts suppliers in China.

But as China continues to disrupt production by imposing severe locks without any warning, a handful of importers in the West have begun to look elsewhere for supply. Jack Phipps, founder of Phipps & Company, an American importer and distributor of home furnishings selling to hotel and apartment developers, said he has been shifting several orders from China over the past two years.

He started buying kitchen cabinets from Vietnam and Turkey, vinyl flooring from Vietnam and India and stainless steel sinks from Malaysia. China’s successive locks have delayed a number of exports, including locking in an area of ​​Ningbo near Shanghai, which last month delayed the shipment of plumbing supplies. Many customers are now wary of trusting China because of tariffs, geopolitical tensions and questions about China’s possible role in the origin of the corona virus, he added.

“Reliability moved me, and the comfort of customers who do not want to order from China,” said Mr. Pips said.

Li Yu Research contributed.

Leave a Reply

Your email address will not be published. Required fields are marked *