And the fun is just starting
/WSJ: China extends lockdown, with no end in sight
China’s official tally of new Covid cases hit more than 28,000 Tuesday. Unlike the previous peak, when more than 90% of cases were concentrated in Shanghai, today all of China’s provinces and regions are reporting cases.
The staying power of zero-Covid policies is partly a reflection of how grassroots implementation in China often differs from central policy. Especially during Covid, the most local levels of Chinese government such as neighborhood committees have been handed far more authority to control people’s activities. While the central government has called on local officials to avoid extreme controls, few have been punished for excessive Covid enforcement while many have been demoted for letting outbreaks spread.
“Policy makers are responding with tighter restrictions, dashing the hope that some held recently of an imminent end of the zero-Covid policy,” said Mark Williams, an economist at research firm Capital Economics.
In accordance with the central government’s guidelines this month, Beijing hasn’t declared any citywide closures of restaurants and shopping malls or suspended in-person schooling.
But the reality on the ground is that much of the city is in de facto lockdown. In downtown Beijing on Wednesday, normally teeming streets were all but deserted. Many mom-and-pop restaurants that typically serve breakfast to people on their ways to work were closed, including for takeout. Men in white hazmat suits patrolled the streets spraying disinfectant in the air.
And this:
Fears that Chinese Covid lockdowns will cause a severe global recession
New cases of COVID-19 are on the rise in China again, which has many international economists worried that the lockdowns resulting from Beijing’s Zero-COVID policy will lead to a severe global recession.
The one-two punch of slowing U.S. growth due to rising interest rates and the Chinese Zero-COVID policy locking tens of millions of people in their homes and out of their workplaces could bring economic growth in developing countries to a screeching halt. The slowdown would eventually reach the U.S. as slowing exports would affect the manufacturing sector.
The new lockdowns are hitting the transportation center of Guangzhou [Canton — Ed], one of China’s largest cities with nearly 19 million residents. Schools will be shut down, public transportation services will be suspended, and residents are advised to stay home in several districts.
There are rising fears that cities are once again coming to a standstill in the world’s second largest economy. From Guangzhou in the south to Zhengzhou in the central region, surging cases have forced local governments to step up lockdowns in the last few days. China on Sunday reported 26,824 new cases across the country.
Beijing, the country’s capital city, recorded three Covid deaths over the weekend. The Haidian district of the city has canceled in-person classes, according to a statement by the district government Sunday.
Shijiazhuang, the largest city in the northern province of Hebei, also re-imposed a five-day lockdown starting Monday, just a few days after it significantly loosened Covid rules.
The Chinese economic slowdown is unnecessary. But the Communist authorities are stuck with a policy the West abandoned almost two years ago because to change now would be to admit error. And in the cutthroat world of the Chinese Communists, it’s bad enough to be accused of error. Admitting as much can be very unhealthy.
So China will limp along, pretending their “enlightened” COVID policy is saving lives when, even if it is, the same result could have been achieved without the economic disaster. Economic growth, which had rebounded to 3.9% in this last quarter, was already falling back. And other indices were also showing signs that Beijing’s inconsistent policy was leading to disaster.
The Associated Press reports that retail spending shrank by 0.5% from a year earlier in October, falling back from the previous month’s 2.5% growth as cities re-imposed lockdowns. 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 the large interest rate increases by the Fed. Other central banks also raised rates in a so-far futile effort to cool inflation that is at the highest it’s been in 40 years.
Factories in Shijiazhuang were told to operate under “closed-loop management,” which is another way of saying employees need to live at their workplaces. But it’s all for the glory of the fatherland, so no worries.