China’s economy rebounds after lockdowns lifted, but plants continue to close
COVID-19 infections seem to have peaked. Lunar New Year holidays boost tourism and catering. The car and real estate sectors are in difficulty. One of Guangdong’s oldest plants closes, leaving 1,700 people out of work.
Beijing (AsiaNews) – China’s economy is showing signs of picking up after the government lifted strict anti-COVID 19 restrictions last December; however, the recovery is not being felt across all sectors, with some historic plants shutting down.
According to official data, the country has already reached the peak of infections following the reopening. Encouragingly, the feared overload of hospitalisations after the Lunar New Year holiday (two weeks around 21 January) has not materialised, health authorities say.
Millions of Chinese on the move boosted tourism and catering sectors, generating 300 million domestic trips, or 88.6 per cent of those made in 2019, before the pandemic.
Spending in restaurants almost reached the same level of four years ago, while box office receipts topped pre-pandemic sales by more than 14 per cent.
The biggest problems are in the auto and real estate sectors; car sales dropped by 45 per cent by late January compared to a year earlier, while the price of new homes fell for the seventh consecutive month.
Together with weak foreign demand, the housing market crisis is the biggest threat to reviving the country’s economy.
Unemployment is equally a source of concern, with record levels among young workers; however, the demand for new workers is up in services, new energy and materials, and healthcare.
Conversely, traditional manufacturing companies, for decades the driving force of the Chinese economy, have problems.
One striking case is Gogo Garment Manufacturing Ltd, for years the largest manufacturer of undergarments in Dongguan (Guangdong), China’s main manufacturing hub.
Gogo shut its doors on 10 January just days after workers protested over unpaid wages and benefits.
As Hong Kong-based China Labour Bulletin reports 1,700 people lost their jobs, and were given only a few days to pack up their belongings and leave the company's campus.
Local media have reported that more than 3,000 factories have closed in Dongguan in the first six months of 2022, reflecting a long-term trend of shifting production to other countries, which was made worse by the pandemic emergency.
As a result of President Xi Jinping’s zero-Covid policy, China's GDP grew by just 3 per cent in 2022, the second-worst performance since 1976.
The major international economic institutions expect the economy to grow by more than 5 per cent this year, far from the record rates set by Xi’s predecessors between 1990 and 2012.