How China’s Zero-COVID strategy is hurting its economy

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How China’s Zero-COVID strategy is hurting its economy

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COVID-19 updates from China
Image source: © Ababil12 |


  • The world's second-largest economy, China, is struggling hard to meet its economic targets amidst COVID-19 lockdowns
  • China's lockdown has hardly hit the automobile sector
  • The extremely contagious Omicron variant has cast doubt on the long-term viability of China’ zero-COVID strategy

As China is strengthening its lockdown policies to curb COVID-19, it is taking a toll on its economy. Starting from around mid-April, the country reported an increasing trend in confirmed cases of COVID-19.

Reporting 18,362 new cases in last 24-hours, the world's second largest economy is struggling hard to meet its economic targets while sticking to its Zero-COVID policy. The country's capital, Beijing, has reported more infections after conducting rounds of mass testing.

COVID-19 is taking a toll on China’s economy

Image source: © 2022 Kalkine Media®

Effects on economic sector

While all the sectors are facing hardships due to China's lockdown amid COVID-19 surge, the automobile sector has been worst hit. Emergency measures to control the spread of infections have led to shutting down of auto factories, including Tesla's Shanghai plant, in the past two months. This has put a dent in the world's largest electric vehicle market that witnessed a boom before the lockdown. Similarly, other sectors such as luxury goods and fast-food restaurants have also been negatively impacted.

There are also reports of food scarcity in some cities as millions of residents have been confined to home and delivery services are disrupted.

Also read: COVID-19 roundup: Global cases on decline, latest recommendations by WHO

Group buying online has now been trending in China as people can avail lower prices while shopping collectively. It has become part of the survival strategy in the country. Even in an online app, people have difficulty finding sufficient supply of groceries and vegetables.

Lockdowns have majorly affected the country’s two largest cities, Beijing and Shanghai, which are the drivers of China's economy. Shanghai has imposed city-wide lockdowns, whereas Beijing has launched mass testing services.

Related read: Crude oil rises on China's economic stimulus plan

Zero-COVID strategy

China has maintained a strict zero-COVID strategy throughout the pandemic, employing lockdowns, mass testing, quarantines, and border closures to limit the virus. However, the emergence of the highly contagious Omicron variety has cast doubt on the strategy's long-term viability, as the virus has spread to other cities and provinces faster than the government could contain it.

Zero COVID policy

Image source: © 2022 Kalkine Media®

Also read: Lockdowns in China weigh on economic outlook; Should Australia worry?


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