China, which has severely restricted international travel for the last two years, shows little inclination to ease up on its approach for now.
On Wednesday, Wu Zunyou, chief epidemiologist at the Chinese Center For Disease Control and Prevention, said that the epidemic situation would improve soon if China strictly implements existing COVID measures.
A handful of economists have lowered growth forecasts for the first half of 2022, as the COVID surge, coming amid persistent property weakness and global uncertainties, makes it harder for China to hit its full-year target of around 5.5 per cent.
Shanghai-based Bank of Communications cut its forecast for China’s first-quarter GDP growth from 5 per cent to 4 per cent, with the drop coming solely from slowing activity in March, said senior economist Tang Jianwei.
Shanghai has put strict movement curbs on its 26 million residents, barring them from even leaving their front doors other than for COVID-19 tests.
Dan Wang, chief economist at the Hang Seng Bank China in Shanghai, said the primary ripple effect for now from the city’s lockdown was in the financial and legal services sector.
For example, companies looking to go public typically have to work in person with legal teams based in Shanghai – but current travel restrictions make that impossible.
“Macro confidence will collapse if this lockdown continues like this, and it will be reflected in the stock market,” she said. “I expect monetary easing happening pretty soon in the second quarter.”