China coronavirus news: Beijing’s Zero Covid policy backfires and cripples the economy | World | News


It comes as analysts say border restrictions could remain in place for the whole of 2022 as the country prepares for major international events. A Goldman Sachs Group Inc team predicted this week that quarantine measures for international arrivals would likely continue to protect against coronavirus outbreaks at the upcoming Winter Olympics, along with important political milestones, such as the 20th Communist Party Congress.

Ahead of that congress later this year, “we doubt policymakers will eliminate quarantines before then,” analysts added.

They said: “With generally higher transmission during the winter months, it is possible that border restrictions will remain largely intact until spring 2023.”

China is currently applying its Covid Zero strategy, compared to much of the rest of the world which is adjusting to living with the virus.

Mass testing with entire areas strictly sealed off has become a common feature of the country’s approach to combating the spread of the virus.

However, “an early end to China’s zero Covid policy would help further stimulate activity now, giving the economy a good chance of growing at its annual trend rate of 5.5% in 2022,” according to the report. Chief Economist of the Bank of Singapore.

Writing in the Financial Times, Mansoor Mohi-uddin added: “But Beijing is unlikely to abandon its strategy after the National People’s Congress in March.

“Instead, China is ready to maintain its position until the 20th National Party Congress is held in November.”

He continued: “Investors should be prepared for strict lockdowns and closed borders in China that will continue throughout the year.

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Evergrande was deeply entrenched in the Chinese economy, and onlookers fear the effect of a collapse would be similar to that of Lehman Brothers in the United States.

It could also have a significant ripple effect on the real estate and real estate sectors, which account for up to 30% of China’s GDP.

Adding to the uncertainty is concern over the effectiveness of the China-made COVID-19 vaccine, Sinovac, which early studies show is largely ineffective against the Omicron variant.

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