China fights against economic depression due to COVID-19

BEIJING (AP) — Chinese leaders have been struggling to reverse an economic slump while continuing anti-virus tactics that have shut down Shanghai and other cities, adding to challenges from President Xi Jinping as he tries to prolong his stay in power.

The ruling Communist Party has declared that its “COVID zero” goal of preventing all infections takes precedence over the economy. It is a decision with global implications and comes despite warnings from experts, including the head of the World Health Organization, that the goal may be unattainable.

“We don’t think it’s sustainable,” WHO Director-General Tedros Adhanom Ghebreyesus reiterated on Tuesday.

China kept infection numbers low until early this year with a strategy that locked down entire cities but came with high costs. Beijing has switched to a “proactive cleanup” that seals off buildings or neighborhoods if infections are found, but with thousands of new cases of the highly infectious omicron variant being recorded each day, this is keeping most of the 25 million people at home. Shanghai residents. Large parts of Beijing and other cities with tens of millions of people are also on lockdown.

This is disrupting factories and hampering the global flow of goods, from cell phones to iron ore, raising inflation risks in the United States and Europe. Consumer spending is weak, cooling Chinese demand for imported goods.

The ruling party is promising tax rebates and other aid to struggling entrepreneurs that Beijing is counting on to create jobs and wealth. Premier Li Keqiang, the number two leader, warned last week that the employment situation is “complex and bleak.”

On Wednesday, Li called during a cabinet meeting for officials to focus spending and credit policies on avoiding job losses, state television and the official Xinhua news agency reported. They did not give details on possible new initiatives.

Despite promises of aid, forecasts say economic growth in the current quarter will fall to 1.8% from a year ago, from an anemic 4.8% in the last quarter. Growth for the full year is forecast to be as low as 3.8%, below the ruling party’s official target of 5.5% and less than half of 2021’s 8.1% expansion.

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