China’s Economic Growth Slows Sharply as Covid Policy Takes a Toll – The New York Times

by | Jul 14, 2022 | Financial

The Chinese economy grew this spring at its slowest rate since the beginning of the coronavirus pandemic, a sharp slowdown from a Covid-19 policy that continues to prompt widespread lockdowns and mass quarantines, bringing some business activity to a halt.The National Bureau of Statistics said on Friday that the economy expanded 0.4 percent from a year earlier in the second quarter, the lowest rate of growth since the first three months of 2020. That was when the country effectively shut down to fight the early stages of the pandemic, its economy shrinking for the first time in 28 years.The 2020 downturn was short-lived, with the Chinese economy recovering almost immediately. But the current outlook is not so promising. Unemployment is close to the highest levels on record. The housing market is still a mess, and small businesses are bearing the brunt of weakness in consumer spending.The slowing economy poses a political problem for China, which is trying to project unwavering strength and stability in a year when it is scheduled to hold its Communist Party congress. Xi Jinping, the country’s leader, is expected to coast to another five-year term.A thriving economy and the promise of growing wealth have underpinned China’s ascent, part of the bargain that Chinese citizens accept in exchange for living under authoritarian rule. But the lockdowns, a staple of Beijing’s zero-Covid policy, have heightened the risk of instability — socially and economically.“China is the shoe that has never dropped in the global economy,” said Kenneth Rogoff, a professor of economics at Harvard University and a former chief economist for the International Monetary Fund. “China is n …

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