Bloomberg reports that the large COVID-19 epidemic that swept the nation in December contributed to a further slowdown in China’s economy.
To get the picture, the media cites China’s top health authority as saying that 37 million people in China may have been infected with COVID-19 on a single day this week. Therefore, more people choose to stay home to avoid getting infected.
There have been slight changes even though people are free to move so far.
According to Bloomberg, the 3.6 million trips made on the Beijing subway last Thursday, December 22, were 70% below the level on the same day in 2019. Traffic congestion on city streets was only 30% of what it would be in January 2021. Chongqing, Guangzhou, Shanghai, Tianjin, and Wuhan are among the other major cities seeing a similar drop.
On December 23, Chinese language media outlet Da Ji Yuan cited Baidu data indicating that traffic in Beijing fell by 25% compared to 2021. The morning traffic peak on the same date was extremely cold in the megacities of Shanghai and Shenzhen.
Bloomberg says it affects the falling trends in home and car sales. According to Reuters, China’s vehicle sales dropped 9.5% in November. Besides, companies also worry that more workers are getting sick.
The virus’s spread throughout China has tempered the initial euphoria seen in the stock and commodity markets upon reopening.
As reported by Bloomberg, the Shanghai Composite Index has dropped in the past two weeks, returning to near the level it was just before authorities began relaxing curbs on November 11. This month, China’s trading keeps deepening as COVID keeps investors at home.
Stock exchange trading value in Shanghai and Shenzhen fell for a seventh consecutive session on December 20 to 642 billion yuan ($92.1 billion).
Iron ore prices were also set to fall slightly this week as a surge in COVID cases clouded the near-term demand outlook and undermined the impact of recent announcements of real-estate support.
According to Standard Chartered Plc, the market decline reflects small business confidence. Although there was a slight improvement from November, key indicators still showed that small businesses were less optimistic about the current and future situation.
The company’s economists, Hunter Chan and Ding Shuang wrote in a report that “services SMEs continued to face headwinds from weak consumer sentiment amid rising COVID cases.”