China Covid Surge Affects The Consumer Market And Factories!
China Covid Surge: As a wave of Covid cases spreads across the nation, China’s economy is experiencing extreme hardship. Since the world’s second-largest economy significantly loosened its Covid restrictions earlier this month, it is unclear how widely the virus has spread globally.
However, several towns and provinces have witnessed thousands of new cases daily. Numerous people have been forced indoors by the infection’s quick spread, and stores and eateries are now deserted.
Because more employees are sick, factories and businesses must close or reduce production. According to researchers from Capital Economics, “the number of people on the streets has drastically declined from already subdued levels across the country” last week.
That will have an impact on demand. When Beijing abruptly changed course from its strict zero-Covid policy, the Chinese economy was already in a precarious position. Due to extensive lockdowns, retail sales decreased in November, and unemployment rose to its highest level in six months.
Leading figures have recently indicated that they will return their attention to growth in 2019 and have staked their bets on the economy’s recovery from the easing of pandemic restrictions. However, the numbers don’t seem encouraging.
The first few weeks of December saw a decline in the sales of cars and homes. According to the most recent data from the China Passenger Car Association, automakers sold 946,000 automobiles from December 1 to December 18, a 15% decrease from last year.
According to Chinese financial data company Wind, the 30 largest cities’ home sales by floor area dropped 44% from the same week a year ago last week. Home sales in Tier-1 cities like Beijing and Shanghai fell 53% last week compared to the previous year.
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Movements among people have also reduced significantly. According to Wind statistics, the number of subway rides has decreased by roughly 60% in major cities since the middle of this month compared to last year.
According to data from the transportation ministry and the agency regulating the postal service, the volume of truck freight and the number of deliveries decreased across the country in the previous week. Manufacturing has declined at factories as well.
Cement and chemical fibers, two essential industries, have all reported reduced utilization rates of their current production capacity. As more workers are unable to work, BYD, the nation’s largest producer of electric vehicles, announced it would have to reduce output by 2,000 to 3,000 cars per day.
At a seminar on Thursday in Shenzhen, BYD vice president Lian Yubo stated that “the Covid epidemic has seriously damaged our manufacturing.” ‘Twenty to thirty percent of our workers are sick at home.
He also said that for December, the company’s monthly production would probably fall between 20,000 and 30,000 vehicles, shy of its goal. According to Chinese media, numerous factories have been forced to close for weeks due to sick employees and a lack of orders.
Indian health ministry holds key meeting as China witnesses surge in Covid cases. pic.twitter.com/vSz6g30PXc
— Sidhant Sibal (@sidhant) December 21, 2022
According to a Monday article from Caixin, some furniture factories in the eastern Jiangsu province have instructed their staff to take an early and extended holiday to commemorate the Chinese New Year. This year, the Lunar New Year holiday is observed between January 21 and 27.
According to the Securities Daily last week, a publication owned by the state-run Henan Daily Press Group, as many as 60% of textile and dyeing companies in the coastal provinces of Guangdong, Zhejiang, and Shandong, which are the nation’s leading manufacturing hubs, have declared they will halt operations and take a two-month long vacation.
How #China counts #COVID deaths is under scrutiny (again) after announcing so few of them in this surge. We visited multiple funeral sites in #Beijing that are designated for #COVID victims… and found long lines of funeral vans, hazmat suits, and a stream of mourners. @NBCNews pic.twitter.com/pywf8D8pNI
— Janis Mackey Frayer (@janisfrayer) December 20, 2022
According to Capital Economics experts, China’s conflict with Covid may be at its “most hazardous” in the coming weeks. Any regions of the country that are not now experiencing a significant Covid wave are sure to do so soon, they predicted, as the movement to rural areas ahead of Lunar New Year has begun. That will further reduce output, I said.
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