China suffers from sever economic problems

• China’s strict adherence to a zero-Covid policy is making things significantly worse.
• Eight megacities have experienced complete or partial lockdowns during the past two weeks.
• 35% of China’s GDP is generated in cities that have lockdowns (GDP).

China is experiencing serious economic issues. The housing market is crumbling, youth unemployment has reached a record level, growth has stagnated, and businesses are dealing with ongoing supply chain issues.

The second-largest economy in the world is struggling to cope with the effects of a severe drought, and its enormous real estate sector is experiencing negative effects from taking on too much debt.

However, Beijing’s strict adherence to a zero-Covid policy is making things significantly worse, and there is no indication that this will change this year.

Eight megacities have experienced complete or partial lockdowns during the past two weeks.127 million people live in these important hubs of transportation and industries.

According to CNN calculations based on government records, since late August at least 74 cities across the country have been cut off, affecting more than 313 million citizens. According to a recent estimate by Goldman Sachs, 35% of China’s GDP is generated in cities that have lockdowns (GDP).

The most recent limitations highlight China’s unwavering commitment to eradicating the virus with the toughest controls, notwithstanding the harm.

“Beijing appears willing to absorb the economic and social costs that stem from its zero-Covid policy because the alternative — widespread infections along with corresponding hospitalizations and deaths — represents an even greater threat to the government’s legitimacy,” said Craig Singleton, senior China fellow at the Foundation for Defense of Democracies, a DC-based think tank.

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