Despite its effects on the economy, President Xi Jinping does not intend to change his health strategy.
Manufacturing activity in China slipped in October due to anti-Covid restrictions, despite a rebound in growth in the third quarter, official figures showed on Monday. After a brief recovery last month, manufacturing activity, a key indicator of a country’s economic health, contracted again this month. The Purchasing Managers’ Index (PMI) stood at 49.2 points from 50.1 in September, the National Bureau of Statistics (BNS) said. A number below 50 indicates a downturn in activity.
Analysts polled by Bloomberg had anticipated a more moderate contraction (49.8). Manufacturing activity picked up slightly in September after two months of contraction. Its return to the red contrasts with the good growth figures published last Monday in China. Despite repeated confinements, the Asian giant has indeed seen its gross domestic product (GDP) grow by 3.9% over one year between July and September, against 0.4% in the previous quarter, according to official data. .
China continues to follow an inflexible anti-Covid strategy, almost three years after the first cases appeared in Wuhan (center). This policy results in confinements as soon as positive cases appear, almost compulsory PCR tests several times a week or even the placement in quarantine of people from risk areas. These measures, which lead to the unexpected closure of businesses and factories, weigh heavily on the economy. Last week, the largest iPhone factory in the world, in Zhengzhou (center), thus admitted to being affected by an outbreak of Covid, while the Universal Resort amusement park in Beijing had to close for the same reasons.
“Zero Covid” strategy
«The fundamentals of China’s economic recovery and development still need to be consolidated“Admitted in a statement a BNS official, Zhao Qinghe. The figures for manufacturing activity reflect “shortness of breathof the recovery, notes analyst Zichun Huang of Capital Economics. Despite its consequences for activity, President Xi Jinping this month reaffirmed the merits of the “zero covid“, showering any hope of a return to normal. Therefore, “China’s economy will continue to sufferover the next few months, warns Zichun Huang.
Beijing’s health policy is the opposite of many countries, which coexist with the virus and have lifted restrictions. China reported 2,898 new positive cases on its territory on Monday, an increase in the number, which leads to a tightening of measures. For its part, the non-manufacturing PMI, which includes the services and construction sector, also fell this month, to 48.7 points. The index was in positive territory in September (50.6). This is its first contraction since April.
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The power has set a growth target of around 5.5% this year, after 8.1% in 2021. But many economists now consider it unrealistic given the obstacles to activity in China. The International Monetary Fund (IMF) has itself revised down its forecast for China this year (3.2%). It would be its softest growth in four decades, excluding the Covid period.