Several cities including the tech hub of Shenzhen have tightened Covid controls in the last few weeks after reports of new local infections. Since last week, the central Chinese city of Chengdu has ordered people to stay home while authorities conduct mass virus testing.To get more latest china business news, you can visit shine news official website.
As of Tuesday, about 12% of China’s total GDP is now affected by such Covid controls — up from 5.3% last week, Nomura’s chief China economist Ting Lu and a team said in a report. That’s according to the analysts’ new model that weights the GDP of affected areas by how stringent the measures are.
Based on that increase, Nomura cut its GDP forecast to 2.7%, down from the 2.8% estimate set in August.Back [on Aug. 17], when we cut our Q3 and Q4 GDP growth forecasts, we did not expect growth to worsen at such a pace,” the analysts said.
Major investment banks have repeatedly cut their China GDP forecasts this year, especially after the metropolis of Shanghai locked down for about two months. Nomura has had the lowest forecast and has typically cut its estimates before other firms have.
For Tuesday, mainland China reported 323 locally transmitted Covid cases with symptoms and 1,247 without symptoms. Regions ranging from north China to the southeastern coast reported infections.Restrictions on business and social activity vary by region. While many cities such as Beijing may only require regular virus tests, other parts of the country have delayed the reopening of schools or even ordered people to stay home.
“What is becoming increasingly concerning is that Covid hotspots are continuing to shift away from several remote regions and cities – with seemingly less economic significance to the country – to provinces that matter much more to China’s national economy,” the Nomura analysts said.
They warned their new model showed the Covid impact on China’s GDP was quickly nearing levels seen during the lockdown of Shanghai in April and May. At the time, the weighted impact on GDP was just over 20%, according to Nomura’s analysis.
china was once, centuries ago, the world’s biggest economy. Many analysts expect it to regain that distinction in due course. But a host of difficulties besetting the Asian giant, some of which are self-inflicted, will delay the day it overtakes America to return to pole position. A growing number of economists now think that day may never arrive.
China’s population is over four times bigger than America’s. Its economy could therefore surpass America’s in scale long before it matches it in sophistication. Its GDP per person needs to reach only a quarter of America’s for its total GDP to become the biggest in the world. By one measure, China has already achieved that modest feat. Its GDP overtook America’s in 2016 when translated into dollars at “purchasing-power parity”, a method that tries to tally up the goods and services in each country using the same international prices.
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Nomura cuts its China GDP forecast — again
Posted 2022-09-12 02:23:17
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