China’s fresh Covid-19 lockdowns are placing the economy under constraints and disrupting global supply chains, pushing Beijing to request more contingency plans.
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Purchasing managers’ indexes for March indicated that lockdowns in the technology and trade center Shenzhen and automotive city Changchun hampered factory output in the month.
The services sector in China has been hampered as restaurants and retail establishments close because of fresh restrictions and tightened social distancing rules.
Supply chain constraints are increasing as Shanghai struggles with mounting infections. Covid restrictions in the city are affecting operations and reducing the efficiency at the port.
Ting Lu, an economist at Nomura Holdings Inc., stated that Beijing’s determination to maintain the Zero Covid strategy to fight the infectious omicron variant that is likely to have a severe impact on China’s economy.
The worsening economic situation places pressure on policymakers to intensify fiscal and monetary support.