Shanghai heading out of lockdown but China still lost in economic gloom -Breaking
© Reuters. A protective-suit wearing woman stands in lockdown on the street in Shanghai, China during the COVID-19 pandemic. This was May 26th, 2022. REUTERS/Aly Song
Ryan Woo, Stella Qiu
BEIJING (Reuters). Despite progressing towards normality, China’s financial centre, Shanghai, has revealed more plans for post-lockdown. But a nation-wide recovery is still a ways off. It raises the urgency to get more help.
Shanghai is set to be released from lockdown officially on June 1. Since then, COVID-19 restrictions have been relaxed to allow more people to leave and to put more vehicles on the streets.
On Thursday, officials from the city announced that junior and senior high students can go back to their offline classes beginning on June 6. They follow earlier information that was released in the week about the reopening of departmental and shopping malls, but only in batches starting in June 1.
This city with 25 million inhabitants reported Thursday that there were 338 newly transmitted infections in May 25. It was the lowest level since mid-March.
The lockdown that was imposed in April has caused China’s largest city to lose its economic output. Others cities that aren’t under lockdown and still subject to stringent COVID regulations, like Beijing, also have struggled with their local economies.
Premier Li Keqiang gave a dark view on the second largest economy in the world, stating Wednesday that some economic problems were worse than they were in 2020 after the COVID-19 epidemic.
According to many private sector economists, the gross domestic product is expected to shrink in April-June compared with the 1.8% growth recorded in quarter one.
Li said that China intends to strive for “reasonable” growth of GDP in the second quarter. He spoke online to thousands Chinese government officials.
Goldman Sachs (NYSE 🙂 said in a note, “Although there are not many measures that have been announced at this conference,”
After the continued rise in unemployment and very low activity in April, Chinese policymakers have greater urgency in supporting the economy.
Thursday’s statement by the central bank indicated that they would encourage credit to smaller businesses. It also urged financial institutions not to lend to west and central areas, or to sectors and regions affected by COVID.
On Thursday, the finance ministry announced that it will offer subsidy to Chinese airlines between May 21 and July 20, to assist them in weathering higher oil prices.
Because of the lockdowns that have been in place in Shanghai and nearby cities, domestic air traffic is now at a standstill. China Eastern, based in Shanghai, said that passenger numbers fell by 90.7% between a year ago and April.
China Passenger Car Association (CPCA) reported on Thursday that the country’s vehicle sales rose by 34% between April and May.
The industry association warned that despite measures being taken to combat COVID epidemics depressing incomes the sales volume was still 16% lower than twelve months prior.
Nomura Global Economics stated that road freight and express delivery to distribution centres were up last week, but not as strong as a month before.
According to Zheng, an owner of an automobile fastener factory in Zhejiang’s eastern province Zhejiang, “As long China doesn’t relax its COVID Policy,” he said.
“All people lack the confidence and enthusiasm to make investments now.”