China’s COVID cases break records as video shows workers rioting | Business and economics news

Taipei, Taiwan – China’s COVID-19 case count is rising to record highs, signaling more pain for the world’s second-largest economy as hopes fade for a swift exit from Beijing’s draconian “zero-COVID” policy.

The National Health Commission reported 29,157 infections nationwide for the previous day on Wednesday, close to the April peak.

China’s daily workload peaked at 29,411 on April 13, as Shanghai spent several weeks in a punishing lockdown that led to food shortages and rare manifestations of social unrest.

The rising cases come as a video that circulated on social media on Wednesday appeared to show new worker unrest at Apple supplier Foxconn’s massive manufacturing facility in the industrial city of Zhengzhou.

Footage shared on video platform Kuaishou showed people smashing surveillance cameras and windows, tearing down barriers and arguing with officials in safety gear while calling for their pay.

Numerous former Foxconn employees have complained about food shortages and draconian quarantine rules on the campus, which is home to the world’s largest iPhone factory. The Reuters news agency reported that two sources with knowledge of the matter confirmed the protests at the Zhengzhou factory, but declined to provide further details.

More than half of Wednesday’s caseload, including more than 26,400 infections classified as asymptomatic, were reported in Guangzhou and Chongqing, megacities in southern and central China, respectively, that are home to more than 35 million people.

In Beijing, where authorities have closed schools, tightened testing requirements and restricted traffic in and out of the city, the number of infections reached a new peak of 1,486.

Shanghai and Zhengzhou, both of which are battling smaller outbreaks, also saw their cases rise from the previous day.

Guangzhou began a five-day lockdown on Monday, following similar measures earlier this month that sparked rare public protests, while the southwestern city of Chengdu began another round of mass testing on Wednesday.

The restrictions are another blow to China’s sputtering economic recovery and pour cold water on expectations of a shift away from “zero COVID” following the announcement of separate plans to ease restrictions and revive the ailing real estate sector, briefly created a positive buzz on Wall Street.

China sticks to ultra-strict ‘zero-COVID’ strategy as rest of world lives with virus [File: Tingshu Wang/Reuters]

“My feeling is that [the optimism] will be short lived as the market is struggling. The October data was literally terrible, but because they had these two big announcements, they couldn’t just bypass it,” Alicia Garcia-Herrero, the chief economist for Asia Pacific at financial services company Natixis, told Al Jazeera, referring to the economic plan.

“However, November will be just as terrible because the opening has not happened.”

China’s economy is expected to struggle to reach 3 percent growth in 2022, which would be one of its weakest results in decades. Gross domestic product (GDP) officially grew by 3.9 percent in the July-September period, after growing just 0.4 percent in the second quarter.

Garcia-Herrero said a key indicator to watch is mobility, which has remained low in all of China’s major cities except Shanghai, driving consumer spending and investment down. Export growth was also negative in October, falling 0.3 percent year-on-year for the first time since June 2020 due to COVID-19 restrictions and declining demand outside China, Natixis said.

China is now in a kind of Catch-22, Garcia-Herrero said, as the economic recovery requires more mobility, but easing restrictions will lead to an increase in deaths, especially among the elderly.

The country has struggled to vaccinate its elderly population: only 66 percent of people aged 80 and older have been vaccinated, of whom only 40 percent have received a booster shot.

China’s domestic Sinovac vaccine has also been shown in studies to be less effective at preventing serious illness than its mRNA counterparts.

Even if China can increase its vaccination rate and make the transition to a life with the virus, leaving “zero COVID” won’t solve China’s economic woes overnight, said Carsten Holz, an economist at the Hong Kong University of Science and Technology, which the hard strategy as “double blow to the economy”.

“As long as COVID-19 restrictions are in place, they will hamper production, cause supply chain disruptions and disrupt retail,” Holz told Al Jazeera. “When COVID restrictions are finally lifted, the economy will go through several cycles of adjustment, leading to even more disruption and instability. Meanwhile, some of the foreign demand may also have definitely left the PRC [People’s Republic of China].”

‘Living together with the virus’

China’s modest economic recovery in the third quarter also offers little hope for a strong end to the year, according to economists.

Much of the country’s recent growth has been driven by the state sector and not private consumption, said Nick Marro, the chief global trade analyst at the Economist Intelligence Unit, as trust between foreign and private companies in the field “shattered”. remains thanks to “zero COVID.”

“When we think about where the growth is coming from, the economy is increasingly unbalanced,” Marro told Al Jazeera. “If you look at the last two years, a lot of the growth has come from investment and exports and not really from private consumption, because ‘zero COVID’ has just decimated retail activity and private consumption.”

Notably, Chinese e-commerce giant Alibaba, which has seen flat revenue growth in recent months, this month failed to disclose sales figures for its November 11 single-day shopping holiday — an $84.5 billion event in sales. 2021.

Apple supplier Foxconn has also struggled to produce the iPhone 14 Pro and Pro Max at its massive factory in Zhengzhou after a spike in infections forced the company to close its factory earlier this month.

Marro said the plant closure showed the limits of “zero COVID” even as companies try to diversify production sites — but also how far Beijing has to go to convince people to live with the virus.

“What… is interesting is that we saw an exodus of people leaving Zhengzhou, and there was some discussion that the conditions in the dorms were so bad because of ‘zero COVID’, but it also seemed like people were fleeing because they were literally terrified because of the viruses,” he said.

“I think that’s a good illustration of the fact that the government hasn’t done anything to show that COVID isn’t as scary as it used to be. Even if the government wants to lift the COVID zero protocols, the population itself may still be very, very hesitant to accept that and move towards this coexistence with the virus on their own.

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