China’s Covid policy hurts economy

Beijing – Mass testing of China’s vast population could bring fresh misery to the economy, experts warned yesterday, after Beijing vowed to regain control of the narrative around a zero-Covid policy that has strangled growth and fanned anger across the country.

Leaders have taken a hard-line approach to stamping out virus outbreaks, locking down Shanghai – the country’s economic dynamo and biggest city – and slowly restricting movement in Beijing over dozens of new cases.

Authorities have refused to bend to mounting public outcry at food shortages and spartan quarantine conditions in Shanghai, with top officials on Thursday pledging to “unwaveringly adhere” to zero-Covid and “fight against” criticism of the policy.

But experts fear Beijing’s game plan will weigh heavily on the world’s second-largest economy. Analysts at Nomura yesterday predicted that mass testing mandates alone could cost up to 2.3% of annual gross domestic product.

A key index of service sector activity slumped to 36.2 in April, the second-lowest on record, in what some experts said pointed to a country in recession. –