Home » Under the hasty unblocking, the Chinese are cautiously consuming and the merchants are at a loss | Clear Zero

Under the hasty unblocking, the Chinese are cautiously consuming and the merchants are at a loss | Clear Zero

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Under the hasty unblocking, the Chinese are cautiously consuming and the merchants are at a loss | Clear Zero

[The Epoch Times, December 12, 2022](Comprehensive report by Epoch Times reporter Xia Yu) The CCP hastily and haphazardly relaxed the zero-clearing policy last week, causing a series of chaos. People are cautious in consumption because they are worried that unplanned unblocking will lead to large-scale infections; businesses feel at a loss because they are completely unprepared.

Reuters reported that analysts did not expect a quick and broad rebound in spending in China after zeroing out, amid uncertainty among consumers and businesses.

Jorry Fan, who lives in Suzhou, Jiangsu, told Reuters she had given up on all plans to eat out for weeks.

Ms. Fan, 44, a mother of two, said she avoids eating indoors or in crowded places, opting instead for delivery because she fears she or her family may be infected with COVID-19.

“I’m very happy because before, I had to do the nucleic acid test almost every day, so it was more convenient,” she said. “On the other hand, we don’t know who is safe, we don’t know who has the coronavirus (CCP virus) ). So we will be more careful.”

The CCP’s three-year cleanup has severely damaged the Chinese economy, severely affected the daily lives of the people, and led to protests breaking out across China in late November. But the speed with which China’s policies have changed has alarmed overseas experts who had predicted Beijing would take steps to reduce threats to public health before lifting the lockdown.

The hasty unblocking has led to people rushing for antipyretics, and there are long queues for fever clinics in many cities. The Associated Press reported that although it was not clear how much the number of infections had increased after the lockdown was lifted, media interviews and information on social media indicated that outbreaks had occurred in businesses and schools across the country. Some restaurants and other businesses have closed because too many employees have fallen ill.

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Fear of an easing of anti-epidemic measures expected to unleash a wave of infections in China that experts say could affect at least 60% of its 1.4 billion population has forced many off the streets while potentially disrupting workplaces and supply chains.

Merchants are confused and unprepared

While some reports from analyst firms have shown a surge in bookings for domestic flights and movie tickets in China, the changes have come from a low base, in stark contrast to the sight of empty subway seats during peak hours in big cities like Beijing and Shanghai.

A spa inside a shopping mall in central Beijing, which reopened on Friday, said most of its staff had returned but it had far fewer customers.

“Because of the epidemic, we are now using promotions and coupons to attract customers, which actually makes us at a loss.” One of the masseuses said.

Many businesses also said they were caught off guard, with one executive at a major hotel chain saying they were “completely unprepared for such a dramatic and reckless reopening.”

He told Reuters that with many hotels still being used for quarantine purposes, it was proving difficult to convince owners to open and hire more staff after the zero-out campaign fostered a conservative mindset.

The executive, who spoke on condition of anonymity, added: “The company is now adjusting its strategy to focus 80 percent of its resources on capitalizing on ‘retaliatory’ spending while retaining 20 percent of hotel occupancy and staffing in case Come back in isolation.”

Sales of items such as cosmetics, wine and spirits have been boosted as cautious consumers stay home in the coming months, Jason Yu, managing director of Greater China at consumer research firm Kantar Worldpanel, told Reuters. may continue to be affected.

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Instead, people will focus on health-promoting goods and buy less instant noodles and frozen meals, he said.

The long lines outside pharmacies also contrasted with the lackluster traffic in malls as people stocked up on antigen test kits and medicines for cold and flu symptoms.

Suppressed Chinese spending hits foreign investors’ confidence

Ongoing concerns about job security and an economic slowdown could also dampen Chinese spending.

Some economists have already downgraded their forecasts for China’s economic growth early next year, looking set to extend this year’s worst growth numbers in half a century.

“The shift from quarantine in isolation facilities to home quarantine will not increase retail sales significantly,” ING Greater China chief economist Iris Pang told Reuters.

A lack of rebound in consumer spending could also weigh on investor confidence. “I don’t think investor sentiment has become very optimistic,” Jian Shi Cortesi, investment director at Zurich-based GAM Investments, said at an outlook meeting last Wednesday, citing conversations with European investors, Nikkei reported.

Carlos Casanova, senior Asia economist at Geneva-based private bank UBP, said investment demand was extremely fragile following a sharp correction in Chinese stocks over the past two years.

Foreign investors sold yuan-denominated bonds — including Chinese government bonds — for 10 straight months this year, according to data through October — dumping 691 billion yuan in the period.

UBP’s Casanova said China’s proposed “shared prosperity” means investors may have to look elsewhere for higher returns.

Companies that have benefited from China’s globalization and burgeoning middle class over the past two decades will not offer the same types of returns under Xi’s shared prosperity goals, he explained.

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“In the past, these kinds of companies have driven a lot of returns in Chinese equities,” Casanova said. “We don’t have enough understanding of who will be the driver of the next cycle.”

Responsible Editor: Ye Ziwei#

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