China’s economic growth drops to 0.4 per cent amid draconian lockdown measures and severe heatwave
Amid burgeoning Covid cases in the country and a sweltering heat wave that has brought major cities to a halt, China’s economic growth has hit a new two-year low. According to data released by China’s National Bureau of Statistics, the world’s second-biggest economy grew by a tiny 0.4 percent in the second quarter (April-June).
However, international experts dispute the report and argue that the Chinese economy may have contracted in the same period. With President Xi Jinping missing from the public eye for over two weeks now, the new report is expected to mount additional pressure on him.
While countries across the globe are opening up their borders and economies after braving a pandemic, Beijing is employing draconian measures to keep up with its ‘zero-Covid tolerance’ policy.
The strategy has been one of the primary reasons why China has lagged in its economic recovery. For months, the tough lockdown measures imposed by the Communist Party of China (CCP) led to a decrease in manufacturing as factories and offices were closed down for prolonged periods.
If the slowdown continues, China could see investors packing their bags. Moreover, last year’s Evergrande debacle is still hurting China’s image on the global map. Evergrande was a crown jewel of China once but the company was soon exposed and currently stands on the cusp of defaulting after owing more than $310 billion to banks and other stakeholders.
It is reported that China will also miss the target of 5.5 per cent economic growth by the year end. If that happens, it will be a rarity and a direct consequence of the ultra-strict Covid policies of the Xi Jinping regime.
(With inputs from agencies)
