It seems that China is still at war with COVID.
South China Morning Post reported that COVID cases peaked at well above 31,000 on November 23, over 2,000 higher than the previous high of over 29,000 cases in mid-April.
China keeps building more isolation and quarantine facilities.
Local CCP authorities in megacities, such as Beijing, Shanghai, Guangzhou, and Chongqing, have all recently tightened restrictions.
The capital Beijing reduced the limit time for travel after providing a valid negative PCR test from 72 to 48 hours. However, parks, museums, and shopping malls have been closed, and residents are urged to stay home.
The southern manufacturing hub of Guangzhou plans to add nearly 350,000 beds to accommodate the increasing number of patients.
Surging COVID cases and the government’s unwavering commitment to “zero-COVID” measures have shattered hopes for a fast reopening.
In November, China announced measures to optimize COVID controls, giving rise to optimism that the authorities were acting to reduce economic damage from the restrictions before a gradual reopening in 2023.
However, the current case spikes have prompted many places to revert to their previous playbook of restrictions.
According to a Nomura report published on November 24, more than a fifth of the nation’s GDP is now under lockdown, which reaches the same economic impact as Shanghai’s shutdown in April.
As a result, Nomura lowered its forecasts for China’s economic growth in the oncoming period. Notably, 2022’s estimates were reduced slightly from 2.9% to 2.8%, while 2023’s were cut from 4.3% to 4%, citing a “slow, costly and bumpy” reopening of the second-largest economy.
Oxford Economics senior economist Louise Loo said in a report, “Risks to our near-term macro outlook have clearly tilted to the downside,” referring to the recent adverse economic impact of surging COVID cases.Loo added that the latest flare-ups had made Oxford Economics’ predictions of China’s growth more uncertain. However, they share a similar view as Nomura. Notably, the firm’s forecast for 2022 growth will be lowered to 2% or 2.5% from the current 3.1%.