How China is handling the Delta variant and what that means for its economy
Over the last year or so, China has dealt with Coronavirus by imposing tight restrictions and limiting travel. With the new Delta variant arising, there are concerns, however, that using a similar approach will slow economic recovery within the country.
China has been beginning to show signs of implementing such measures after daily infections soared to 143, almost double what it was in the week prior. This has been the highest number of daily cases China has seen in half a year.
To inhabitants of the US, these numbers may seem tiny in comparison. To China they are massive, and its zero-tolerance strategy means that authorities are starting to respond harshly.
There have already been lockdowns of residential compounds and the cancellations of public events, and Beijing even stated that they wouldn’t be allowing incoming travel from Chinese cities that have Covid cases. In Nanjing, all of its 9.2 million residents underwent testing within a matter of weeks.
As a result of China’s response to the increased cases, groups such as Goldman Sachs and Morgan Stanley have cut down their full-year growth outlooks. If these new Covid cases aren’t contained, it’s predicted that there could be a potential strain in China’s manufacturing output, which would also negatively influence global supply chains.
Furthermore, China’s domestic consumption would almost certainly be hit the worst, with tourism and catering sectors being most affected.
It’s unknown how China will fully respond to the new variants, but it can be expected that it will impose severe restrictions until the virus’ presence is virtually eliminated within the country.
China’s stance can be summed up in a statement by Gao Qing’s former health minister, “It is absolutely unfeasible to ‘coexist with the virus’. We must always tighten the string of virus protection”.
Experts still agree that China’s economy will grow overall, but not as high as it should, and that its handling of the virus may have ripple effects that affect other countries in a more negative way.