On Thursday, China announced a record-high number of COVID-19 infections, prompting localized lockdowns and other restrictions in cities around the country. These measures are ominous for the future of the second-largest economy in the world.
Investors' expectations that China will soon relax the stringent zero COVID-19 policy that, along with a decline in the real estate market, is pounding the economy are being dashed by the increase in infections, which is reaching record highs not seen since an epidemic in Shanghai earlier this year.
The restrictions have also extracted a toll on China’s increasingly frustrated residents, as well as output at factories including the world’s biggest iPhone plant, which has been rocked by violent clashes between workers and security personnel in a rare show of dissent.
“We believe reopening is still likely to be a prolonged process with high costs,” Nomura analysts wrote in a note. The brokerage cut its GDP forecast for the fourth quarter to 2.4 percent year-over-year from 2.8 percent, and also cut its forecast for full-year growth to 2.8 percent from 2.9 percent.
China recorded 31,444 new local COVID-19 cases for Wednesday, breaking the record set on April 13, when Shanghai was in a city-wide lockdown that would last two months.
Investors' expectations that China will soon relax the stringent zero COVID-19 policy that, along with a decline in the real estate market, is pounding the economy are being dashed by the increase in infections, which is reaching record highs not seen since an epidemic in Shanghai earlier this year.
The restrictions have also extracted a toll on China’s increasingly frustrated residents, as well as output at factories including the world’s biggest iPhone plant, which has been rocked by violent clashes between workers and security personnel in a rare show of dissent.
“We believe reopening is still likely to be a prolonged process with high costs,” Nomura analysts wrote in a note. The brokerage cut its GDP forecast for the fourth quarter to 2.4 percent year-over-year from 2.8 percent, and also cut its forecast for full-year growth to 2.8 percent from 2.9 percent.
China recorded 31,444 new local COVID-19 cases for Wednesday, breaking the record set on April 13, when Shanghai was in a city-wide lockdown that would last two months.
