Covid-free China: 100,000 officials attend emergency State Council meeting to revive economy

Officials from provinces, cities and councils took part in the unexpected State Council videoconference, according to the state-run Global Times. Senior Chinese officials were also in attendance, including Premier Li Keqiang, who urged the authorities to take action to save jobs and reduce unemployment.

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

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

33 new economic measures

The teleconference came after Monday’s State Council executive meeting, where authorities unveiled 33 new economic measures, including increased tax refunds, loans to small businesses and emergency loans to the hard-hit aviation industry, the state-run Xinhua news agency reported. .

Some of the 33 policies are also easing Covid restrictions, such as removing truck restrictions from low-risk areas.

At Wednesday’s meeting, Li called on government departments to implement the 33 measures by the end of May. The State Council will send task forces to 12 provinces starting Thursday to oversee the implementation of these policies, he added, according to Xinhua.

How lockdowns in China are affecting global companies

Throughout the pandemic, China has maintained a strict zero Covid policy aimed at rooting out all chains of transmission through border controls, mandatory quarantines, mass testing and sudden lockdowns.

But that strategy has been challenged by a highly contagious variant of Omicron that spread across the country earlier this year, despite authorities rushing to lock down districts and provincial borders.

By mid-May, more than 30 cities were completely or partially closed, CNN estimated, affecting up to 220 million people across the country. For industries ranging from big tech to consumer goods, this is disrupting both supply and demand.

While some of those cities have since reopened, the effects of that disruption are still being felt, with unemployment rising to its highest level since the initial coronavirus outbreak in early 2020.

Many companies have been forced to suspend operations, including automakers Tesla and Volkswagen. Airbnb is the latest multinational to pull out of the project. The home-sharing company announced last week that it had closed its listings in China.

There is no clear end in sight to the crisis as the authorities are still trying to contain the spread of the virus and top leaders are pushing for the advancement of Covid Zero.

On Monday, the capital Beijing, which has also seen an increase in cases over the past few weeks, had seven districts partially locked down, affecting nearly 14 million residents. The city’s two largest districts, Chaoyang and Haidian, were incorporated, forcing the closure of all non-essential businesses, including shopping malls, gyms, and entertainment centers.

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