Taipei, Taiwan – China’s COVID-19 cases are at record highs, signaling more pain for the world’s second-largest economy as hopes fade for a quick exit from Beijing’s draconian “zero-COVID” policies.
The National Health Commission on Wednesday reported 29,157 infections nationwide for the previous day, near the peak in April.
The number of daily cases in China peaked at 29,411 on April 13, as Shanghai had been for several weeks in a punitive lockdown that has caused food shortages and rare outbreaks of social unrest.
The rise in cases comes as a video circulating on social media on Wednesday appeared to show fresh unrest among workers at Apple supplier Foxconn’s massive manufacturing plant in the industrial city of Zhengzhou.
In footage shared on the Kuaishou video platform, workers could be seen smashing surveillance cameras and windows, knocking down barriers and arguing with officials in hazmat suits while chanting for pay.
Many former Foxconn employees have complained of food shortages and draconian quarantine rules on campus, which is home to the world’s largest iPhone factory.
More than half of Wednesday’s cases, which includes more than 26,400 infections classified as asymptomatic, were reported in Guangzhou and Chongqing, megacities in southern and central China, respectively, which are home to more than 35 million people.
In Beijing, where authorities closed schools, tightened testing requirements and restricted travel in and out of the city, infections hit a new peak of 1,486.
Shanghai and Zhengzhou, both battling smaller outbreaks, also saw their cases rise from the previous day.
Guangzhou began a five-day lockdown on Monday, following similar measures earlier this month that led to rare public protests, while the southwestern city of Chengdu began a new round on Wednesday. mass testing.
The restrictions deal another blow to China’s faltering economic recovery and throw cold water on expectations of a “zero COVID” abandonment after separate plans were announced to ease restrictions and revive the real estate sector in difficulty that briefly generated positive buzz on Wall Street.
“My feeling is that [the optimism] will be short-lived as the market has struggled. The October data was literally awful, but because they had these two big announcements, they couldn’t just bypass them,” said Alicia Garcia-Herrero, chief economist for Asia-Pacific at the services firm. Financiers Natixis, to Al Jazeera, referring to economic plans.
“However, November is going to be just as awful because the opening didn’t happen.”
China’s economy is expected to struggle to achieve 3% growth in 2022, which would be one of its weakest performances in decades. Gross domestic product (GDP) officially rose 3.9% in the July-September period, after growing just 0.4% in the second quarter.
Garcia-Herrero said a key indicator to watch is mobility, which remained weak in all major Chinese cities except Shanghai, driving down consumer spending and investment. Export growth was also negative in October, down 0.3% year-on-year, for the first time since June 2020 due to COVID-19 restrictions as well as faltering demand outside China, according to Natixis .
China is now in something of a Catch-22, Garcia-Herrero said, as its economic recovery requires increased mobility, but easing restrictions will lead to increased deaths, especially among the elderly.
The country is struggling to vaccinate its elderly population, with only 66% of people aged 80 and over vaccinated, of whom only 40% have received a booster shot.
China’s national vaccine Sinovac has also been shown in studies to be less effective at preventing serious disease than its mRNA counterparts.
Even if China can increase its vaccination rate and transition to life with the virus, coming out of “COVID zero” won’t solve China’s economic problems overnight, said Carsten Holz, an economist at the Hong Kong University of Science and Technology, which described the hardline strategy as a “double whammy for the economy.”
“As long as the COVID-19 restrictions are in place, they are hampering production, creating supply chain disruptions and disrupting retail sales,” Holz told Al Jazeera. “When COVID restrictions are finally lifted, the economy goes through several cycles of adjustment, leading to even more disruption and instability. In the meantime, some of the foreign demand may also have permanently left the PRC [People’s Republic of China].”
“Coexistence with the virus”
China’s modest economic rebound in the third quarter also doesn’t offer much hope of ending the year strong, economists say.
Much of the country’s recent growth has been driven by the public sector and not by private consumption, said Nick Marro, senior global trade analyst at the Economist Intelligence Unit, as confidence between foreign and private companies on the ground remains “broken” thanks to “zero covid”.
“When we think about where the growth is coming from, the economy is increasingly out of balance,” Marro told Al Jazeera. “If you look at the last couple of years, a lot of the growth is coming from investment and exports and it’s not really coming from private consumption because ‘zero COVID’ has just decimated retail activity. and has just decimated private consumption. »
Notably, Chinese e-commerce giant Alibaba, which has seen revenue growth stagnate in recent months, did not disclose sales figures for its “one-day” November 11 shopping holiday this month – a event that recorded $84.5 billion in sales in 2021.
Apple supplier Foxconn also struggled to produce the iPhone 14 Pro and Pro Max at its massive factory in Zhengzhou following a spike in infections that forced the company to shut down its factory earlier this month.
Marro said the plant closure showed the limits of “zero COVID” even as companies try to diversify production sites – but also how far Beijing needs to go to convince people to live with the virus.
“What’s…interesting is that we’ve seen an exodus of people leaving Zhengzhou, and there’s been some talk about the conditions in the dorms being so bad because of ‘zero COVID’, but there also seemed like people were running away because they were literally terrified of catching the virus,” he said.
“I think it’s a great illustration that the government hasn’t done anything that shows that COVID isn’t as scary as it used to be. Even if the government wants to lift the zero COVID protocols, the people themselves even could still be very, very hesitant to accept this and move towards this coexistence with the virus.