Uncertainty in Chinese business community as Covid 19-induced restrictions return

1/23/2021

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Uncertainty and fear have gripped the business community in China as it reported an increase in Covid-19 cases. Another round of lockdown in parts of the country could impact the economic revival leaving many jobless once again. China reported 144 new cases on Thursday.

"While the number is not startling, the fact is that there was no case for months and if the numbers show an increase, there could be another round of lockdown, though restrictions are already in place," a person with direct knowledge said.

The lockdown in China in the first quarter of 2020 had left millions jobless in the country. The worst affected were the migrant labourers, who had come to the cities from rural areas.

Typically, China needs to create about 15 million jobs every year. "For that the economy needs to grow at a healthy pace. However, millions remained jobless due to the slowdown but things had started to look up. Now the uncertainty is back," he added.

According to Hindustan Times, "tens of millions of people have been under some kind of lockdown in northern cities amid worries that undetected infections could spread quickly during the Lunar New Year holiday, which is just weeks away". A massive testing drive is underway in the country.

Earlier, the authorities, pressed the emergency button by sealing off several districts in Beijing, restricting movement.

"There is rising apprehension over another wave of coronavirus, while at present, there are restrictions of movement, concern is rising among the citizens as this could once again impact the economy in a brutal way," an entrepreneur said, adding that the country was looking towards a healthy recovery in the economy.

China had imposed a lockdown in a few cities last year in January-February to contain the spread of the virus. However, China's economy took a hit, contracting by 6.8 per cent for the first time since 1992 – the year when it started recording quarterly growth figures. This had impacted jobs and livelihood of the citizens.

However, the country's economy has been showing signs of recovery since then. China is one of the few countries to post economic growth of 2.3 per cent in 2020 when the global economy took a massive hit due to Covid-19 pandemic. But concerns remain as consumption showed no signs of picking up giving rise to doubts over the quality of growth.

According to Xinhua, the state run news platform, China's retail sales of consumer goods fell 3.9 per cent year on year in 2020, though the country's fourth quarter GDP growth stood at a strong 6.5 per cent.

Source: IANS

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