Beijing – Fresh Coronavirus outbreaks and decline in the investment, retail, hoteling and real estate sectors have once again slowed down China’s economy. In the July-September quarter, China’s economic growth slowed by 0.8 per cent. New figures show that the Chinese economy continued to suffer for two consecutive months in October and November. Analysts are concerned that the shocks could slow China’s economic growth by the end of the year and have repercussions in the coming year.
On Wednesday, Chinese authorities released economic data for November. According to these figures, retail sales, hoteling and investment sectors, along with real estate, have been hit hard. Demand for houses and sales have declined, and investment in the sector has also declined. Home prices have been falling for three months in a row due to the ‘Evergrande Crisis’, and there are indications that it will continue for a few more months. Home sales have fallen by as much as 20 per cent. Investment in the real estate sector fell by 1.2 per cent.
The retail sales sector growth rate has fallen by 4 per cent. The hotel and catering sector has declined by more than 2.5 per cent. Investment in infrastructure and manufacturing has also declined. Although a marginal increase has been recorded in the industrial production sector, a new outbreak of the corona is expected to hit this sector. Omicron cases have started to be detected in China. Chinese agencies informed that one case has been reported from the Tianjin and Guangdong provinces. But in the last few days, a fresh outbreak has been reported from the Xinjiang province, the hub of production and exports in China.
Nearly 200 cases have been reported from the province and the local administration has ordered factories to be shut down. Ningbo Port, the hub of exports, is subject to several restrictions and limitations placed on shipping and cargo. Therefore, there are indications that China’s internal supply chain will be in disarray once again.
Zero Lockdown has been imposed in many Chinese cities and analysts are warning that this would hit China’s economy in a big way. Analysts expressed concerns that China will record an economic growth rate of less than 8% in 2021, and it would be a major task to maintain a rate of even 5% in the next year. Australian analyst Clifford Bennett has claimed that the decline in China’s growth rate could become a permanent situation.
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