[The Epoch Times, December 27, 2022](Comprehensive report by Epoch Times reporter Zhang Ting) In the past three years, China’s factories and consumer markets have been hit hard by the “zero-clearing policy”, which has seriously dragged down the economy. The situation did not improve after the CCP abruptly abandoned the “zeroing” earlier this month. Currently, the economy continues to be under enormous pressure from the COVID tsunami that is unfolding across the country.
Analysts said the next few weeks could be the “most dangerous period”.
The rapid spread of the COVID-19 virus has forced many people indoors, leaving shops and restaurants empty. Factories and companies have also been forced to close or reduce production as more workers fell ill.
“Nationally, the number of people on the streets has fallen sharply from already depressed levels,” analysts at Capital Economics said in a research note last week. “This will affect demand.”
China’s economy was already struggling when Beijing abruptly abandoned its “zero-out policy.” Retail sales already shrank in November amid the widespread lockdowns that followed, and the unemployment rate soared to its highest level in six months.
Statistics are not optimistic
CNN said that although the top leaders of the Chinese Communist Party have recently stated that they will shift their focus back to economic growth next year and bet on relaxing epidemic prevention measures to boost the economy. But the statistics don’t look promising.
Both auto and home sales fell in the first few weeks of December. The latest statistics from the China Passenger Car Association show that from Dec. 1 to Dec. 18, automakers sold 946,000 vehicles, down 15 percent from the same period last year. Last week, home sales by square footage in the 30 largest cities plunged 44% from a year earlier, according to Chinese financial data provider Wind. In first-tier cities such as Beijing and Shanghai, home sales plummeted 53% last week from a year earlier.
People’s travel has also dropped sharply. According to Wind data, since the middle of this month, the number of subway trips in major cities has dropped by about 60% compared with the same period last year.
Nationally, truckloads and express orders have shrunk over the past week, according to statistics from the Department of Transportation and the Postal Service regulator.
Factories have also cut back on production; key industries such as cement and chemical fibers have both reported lower utilization rates at their existing capacity. Chinese steel mills are now reducing output, with industry association data showing production fell in the middle of the month and inventories rose, Guangfa Futures said in a report.
Many factories have been shut down for weeks due to sick workers and a lack of orders.
BYD, China’s largest electric vehicle maker, said it had to cut production of 2,000 to 3,000 vehicles a day as more workers were unable to work.
“The outbreak of COVID has seriously affected our production,” BYD Vice President Lian Yubo said at a forum in Shenzhen last Thursday (Dec. 22). “20 to 30 percent of our employees are sick at home.”
He added that the company’s monthly production in December may be 20,000 to 30,000 vehicles short of its target.
The government of Zhejiang, an industrial province of 65.4 million near Shanghai and with a population of 65.4 million, said on Sunday (Dec. 25) that there were about 1 million new infections every day. This number is expected to double in the coming days.
The city of Qingdao in eastern Shandong province estimates as many as 530,000 residents are infected every day.
The Beijing government said the number of fever clinics in the capital had increased from 94 to nearly 1,300, state media said. There are 2,600 such clinics in Shanghai. But there have been concerns about the ability of China’s less affluent cities to handle a surge in severe infections, especially as hundreds of millions of migrant workers are expected to return home before the Chinese New Year.
“I’m worried that there will be a lot of traffic … (and) there will be another outbreak,” said a Shanghai resident surnamed Lin, according to Reuters.
Capital Economics analyst: The next few weeks may be the “most dangerous period”
According to a Caixin report on Monday, several furniture factories in eastern Jiangsu province have told employees to take long holidays early and go home for the Chinese New Year. The Chinese New Year holiday is normally between January 21st and January 27th.
According to other Chinese media reports, as many as 60% of textile and printing and dyeing companies in coastal provinces such as Guangdong, Zhejiang and Shandong have announced that they will suspend production and have a two-month holiday. These provinces are major manufacturing centers in China.
Capital Economics analysts said the next few weeks could be the “most dangerous period” in China’s battle with COVID-19, CNN reported.
With the return of migrant workers ahead of the Chinese New Year, areas of China not currently in the COVID wave could soon see one, they said.
“This will further suppress output,” the analysts said.
Although scientists don’t yet know exactly how the virus will develop, there are fears that variants may occur. They say it could be similar to the Omicron variant that is circulating now; it could be a combination of strains, or something completely different.
Responsible editor: Lin Yan#