Xi warms up China’s economy, but virus narrows options
President Xi Jinping has offered state support for technology, infrastructure and jobs to revive China’s economy, but analysts warn growth will continue to falter until Beijing abandons its rigid controls against viruses.
Two and a half years after the outbreak of the coronavirus in Wuhan, China is the last major economy still closed in the world, despite its relatively low death toll.
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Shutdowns in dozens of cities – from the manufacturing hubs of Shenzhen and Shanghai to the breadbasket of Jilin – have wreaked havoc on supply chains in recent months, crushing small businesses and trapping consumers at home.
This has jeopardized Beijing’s annual growth target of around 5.5%, with forecasters predicting that around a percentage point could be cut from that figure.
“We remain deeply concerned about growth,” Nomura analysts said this week. “We believe that the Omicron variant and the zero Covid strategy represent the main challenges to stable growth.”
Still, China’s communist leaders insisted on Thursday that the country would “unswervingly” stick to zero-Covid, with a meeting chaired by Xi declaring that “persistence is victory”.