China zero-Covid: 100,000 officials attend special meeting of the State Council to revive the economy

The state council’s unexpected teleconference was attended by provincial, city and council officials, according to a report in the state-run Global Times. High-ranking Chinese officials were also present, including Prime Minister Li Keqiang, who urged authorities to take action to keep jobs and reduce unemployment.

Lee said that in some respects, the economic impact seen in March and April has surpassed that of 2020 during the initial coronavirus outbreak, according to the Global Times. He pointed to several indicators, including unemployment rates, lower industrial production and freight.

The prime minister has been vocal about the economic downturn in recent weeks, calling the situation “complex and serious” earlier in May – but Wednesday’s comments could paint the gloomiest picture ever.
Investment banks are lowering their forecasts for China’s economy this year. Earlier this week, UBS cut its full-year GDP growth forecast to 3%, citing risks from Beijing’s strict zero-Covid policy. China has said it expects growth of around 5.5% this year. The world’s second largest economy reported growth of 8.1% last year and 2.3% in 2020, the lowest rate in decades.

33 new economic measures

The teleconference follows a meeting of the State Council on Monday, where authorities unveiled 33 new financial measures, including raising tax refunds, extending loans to small businesses and providing emergency loans to the hard-hit airline industry, according to state news. Xinhua agency. .

Several of the 33 policies also facilitate Covid restrictions – such as lifting restrictions on trucks traveling from low-risk areas.

At Wednesday’s meeting, Lee urged government agencies to implement the 33 measures by the end of May. The State Council will send working groups to 12 provinces from Thursday to oversee the development of these policies, he added, according to Xinhua.

How China's lockdowns affect global companies

Throughout the pandemic, China has pursued a strict Covid zero policy aimed at eliminating all transmission chains using border controls, mandatory quarantines, mass testing and emergency lockdowns.

But that strategy has been challenged by the highly contagious Omicron variant, which sprang across the country earlier this year, despite authorities struggling to lock in regions and cross-border borders.

As of mid-May, more than 30 cities were completely or partially blocked, affecting up to 220 million people across the country, according to CNN estimates. For industries ranging from Big Tech to consumer goods, this destroys both supply and demand.

Although some of these cities have since reopened, the impact of this disruption is still being felt, with unemployment rising to its highest level since the initial coronavirus outbreak in early 2020.

Many companies were forced to suspend operations, including Tesla and Volkswagen. Airbnb is the latest multinational company to leave, with the home-sharing company announcing last week that it would close its listings in China.

There is no clear end to the crisis, with authorities still struggling to curb the spread of the virus and top leaders insisting on promoting Covid Zero.

On Monday, the national capital Beijing – which has also seen cases rise in recent weeks – saw seven areas go into partial lockdown, affecting nearly 14 million people. The city’s two largest neighborhoods, Chaoyang and Haidian, were included – forcing all non-core businesses to close, including shopping malls, gyms and entertainment venues.

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