China will likely show much less economic growth next year than previously because the corona pandemic and lockdowns are still causing significant disruption.
That says the World Bank, which has significantly lowered its growth expectations for the second-largest economy in the world.
According to the UN institution, growth for this year is likely to amount to 2.7 percent, compared to a plus of 4.3 percent in the previous estimate in June. Moreover, the forecast for the next has been reduced from 8.1 percent to 4.3 percent. Both figures are well below the Chinese government’s growth target of about 5.5 percent, which many analysts say is unattainable.
After years of strict lockdowns, mass testing, long quarantines and travel restrictions, China abruptly abandoned its so-called zero-covid policy earlier this month. But companies are still experiencing major disruptions due to corona. This is because corona infections have recently increased, and various restrictions are still in force.
Experts are distressed China is ill-equipped to deal with the latest virus wave as the country pushes ahead with its reopening. Another factor is that millions of frail older people in China are still not vaccinated. The economy is also under pressure on other fronts. For example, the real estate sector has not been doing well for some time, and youth unemployment in China is relatively high.