The city of Guangzhou in the southern Guangdong Province has been hardest hit by the latest Covid outbreak. Pictured here are closed stores in a part of the city on October 31, 2022.
Vcg | China Optical Group | Getty Images
BEIJING – COVID-19 infections are increasing in the capital of China’s export-heavy province, Guangdong, raising fears of another burden on the national economy.
Schools in eight of the 11 districts in Guangzhou moved classes online for most students as of Thursday. In the past few days, other parts of the city have ordered people to stay home, and non-essential businesses have been ordered to close.
“Given the current situation, it is difficult to know whether Guangzhou will repeat the Shanghai experience this spring,” Ting Lu, chief China economist at Nomura and team said in a note late Wednesday. “If Guangzhou repeats what Shanghai did in the spring, it will lead to a new round of pessimism about China.”
Earlier this year, the city of Shanghai shut down for nearly two months, and broader Covid controls resulted in second-quarter national gross domestic product that grew just 0.4%, according to official figures. GDP rebounded again in the third quarter with 3.9% growthbut after that Exports fell unexpectedly in October.
It was not immediately clear to what extent recent business restrictions in Guangzhou affected the factories’ ability to operate. There are many manufacturers out of town but in the same county.
State-owned automaker GAC said its factories in Guangzhou were operating normally as of Thursday morning. “The pandemic has not caused a significant impact,” the company said in a statement.
In just one week, the number of Covid-19 infections with symptoms in Guangdong had tripled to 500 as of Wednesday. During that time, asymptomatic infections rose seven times, to about 2,500.
Michael Hart, president of the chamber, said Thursday that the latest outbreak prompted the American Chamber of Commerce in China to postpone an event in Guangzhou, which had already been postponed from September. Two more Chamber events in the city are expected to be postponed this year.
“These effects of travel are detrimental to the ability of local governments to attract investment,” Hart said, noting that these investments were not lost but delayed.
“I canceled more travel than I could actually do,” he said.
Late autumn is a common time for conferences and business travel in China.
Notably, Guangzhou has indefinitely postponed its auto show, which was scheduled to start next week. The country’s largest auto show that was supposed to be hosted by Beijing earlier this year has yet to be rescheduled.
More travel restrictions
“Maybe it’s a bigger concern [than getting sick] is what he does [travel] Hart said, referring to the government’s smartphone app to track Covid exposure.
The city requires anyone entering a shopping mall, taxi, or public place to use the app. A venue can refuse entry if the app shows an individual has not had a negative Covid test result in the past three days – or holds a “pop-up” that is supposed to indicate suspected contact with a Covid infection.
The pop-up prevents people from entering Beijing.
His appearance has become so frequent and somewhat unpredictable that every business trip outside Beijing has been a choice between family and work, a Chinese commentator said in a widely shared video. The video was removed from public view Thursday morning.
The pop-up for the Beijing health code app is also affecting the movement of people within the capital, which has reported a growing number of infections over the past several days.
“In Beijing, you just assume that a certain percentage of the workforce will have problems with popups,” Hart said, noting that virus testing requirements for some office buildings have increased to once every 24 hours. “Instead of getting looser, it gets tighter in some areas.”
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