Economic Outlook Sours as China Sees Record COVID Cases

Some three years after the earliest cases of COVID-19 emerged, infections in China have hit a record high and many millions of people are under lockdowns. Some 31,444 new locally acquired infections were reported Wednesday, breaking a record set in April when a surge in cases led to Shanghai being locked down for two months, reports Reuters. "China is seeing a record level of lockdowns," says Ting Lu, chief China economist at Nomura, per the Financial Times. Ting says the situation for China's economy is even worse than it was during the lockdown of Shanghai, the country's biggest city, because there are so many smaller lockdowns spread out across the country.

Outbreaks are growing in cities including Chongqinq, Guangzhou, and Beijing, where the Center for Disease Control and Prevention says the capital is facing its "most complex and challenging" period since the start of the pandemic. China reported its first COVID deaths in six months this week, bringing the total to 5,232, the AP reports. Nomura estimates that areas responsible for around a fifth of China's GDP are currently under some form of lockdown. "Shanghai-style full lockdowns could be avoided, but they might be replaced by more frequent partial lockdowns in a rising number of cities due to surging COVID case numbers," the bank's analysts say. They have downgraded the outlook for China's economy.

The ruling Communist Party regime has vowed that its "zero COVID" policy, including mass testing and travel restrictions, will continue, but discontent is rising. This week, workers clashed with police at a massive Foxconn manufacturing complex which is operating under a "closed loop" system, with workers living at the site. With no end to restrictions in sight, people in China watching the World Cup in Qatar on TV have been saying the event looks like it is happening on a different planet, with thousands of people gathering with no masks, social distancing, or COVID checks, the BBC reports. An open letter on the Weibo social network pointing out the contrast and questioning China's policies was quickly censored. (More China stories.)