Beijing’s Covid gloom deepens as China relaxes curbs after protests

Beijing’s Covid-19 gloom deepened on Sunday with many shops and other businesses closed, and an expert warned of many thousands of new coronavirus cases as anger over China’s previous Covid policies gave way to worry about coping with infection.

China dropped most of its strict Covid curbs after unprecedented protests against them, but cities that were already battling with their most severe outbreaks, like Beijing, saw a sharp decrease in economic activity after rules were scrapped.

Anecdotal evidence suggests that many businesses have been forced to close as infected workers quarantine at home while many other people are deciding not to go out because of the higher risk of infection.

Zhong Nanshan, a Chinese epidemiologist, told state media that the Omicron strain of the virus prevalent in China was highly transmissible and one infected person could spread it to as many as 18 others.

With regular Covid testing of Beijing residents scrapped and reserved only for groups such as health workers, official tallies for new cases have plunged.

Health authorities reported 1,661 new infections for Beijing on Saturday, down 42 per cent from 3,974 on December 6, a day before national policies were dramatically relaxed.

But evidence suggests there are many more cases in the city of nearly 22 million people.

Higher risk

Sunday is a normal business day for shops in Beijing and it is usually bustling, particularly in spots like the historic Shichahai neighbourhood packed with boutiques and cafes.

But few people were out and about on Sunday and malls in Chaoyang, Beijing’s most populous district, were practically deserted with many salons, restaurants and retailers shut.

Economists widely expect China’s road to economic health to be uneven as shocks such as labour crunches due to workers calling in sick delay a full-fledged recovery for some time yet.

China’s economy may grow 1.6 per cent in the first quarter of 2023 YoY, and 4.9 per cent in the second, according to Capital Economics.

Epidemiologist Zhong also said it would be some months before a return to normal. “My opinion is in the first half of next year, after March,” he said.

While China has removed most of its domestic Covid curbs, its international borders are still largely closed to foreigners, including tourists.

Inbound travellers are subjected to five days of quarantine at government facilities and three additional days of self-monitoring at home.

But there are even hints that that rule could change.

 

Skoda may leave China, focus shifts to India

 

Czech carmaker Skoda Auto, part of Volkswagen, is considering withdrawing from China and will make a final decision next year, CEO Klaus Zellmer was quoted as saying by the weekly magazine Automobilwoche.

“The competition is very intense there, so we will consider, together with our Chinese joint venture partner, how we want to proceed,” Zelmer was quoted as saying.

“If we want to focus our energy, it’s worth checking all scenarios and then deciding.” The chief executive said the company could consider simply selling cars in China rather than also producing them there. Skoda wants to focus more in India at the moment, he said.

Volkswagen did not immediately reply to request for comment. Reuters

 

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)