It seems that the Covid-19 infections have already reached their peak. Lunar New Year celebrations: consumption in tourism and restaurants increases. The automotive and real estate sectors, in trouble. A historic Guangdong textile company closes, leaving 1,700 people jobless.
Beijing () – The Chinese economy is showing signs of recovery after the government abandoned strict lockdown measures in December to combat Covid-19. However, the recovery is not affecting all sectors, as some historical factories are closing their doors.
According to official data, the country would have already reached the peak of infection after the reopening. What is encouraging, according to the health authorities, is that the feared overload of hospitals did not occur after the Lunar New Year holidays (two weeks between January 21).
The millions of Chinese who moved around the country revived the tourism and restaurant sectors. During the holidays, 300 million national trips were calculated, 88.6% of the trips made in 2019, before the pandemic. Restaurant spending nearly matched levels of four years ago, while movie attendance exceeded them by more than 14%.
The biggest problems were in the automobile and real estate sectors: at the end of January, vehicle purchases were down 45% from a year earlier, while new home prices fell for the seventh consecutive month. Along with weak foreign demand, the housing market crisis is the biggest threat to the recovery of the national economy.
Employment is also a concern, with a rate of young people without work that is close to record levels. Demand for labor grew in sectors such as services, new energy and materials, and healthcare.
In addition, traditional manufacturing companies, for decades the engine of the Chinese economy, are struggling. A striking case is that of Gogo Garment Manufacturing Ltd, for years the largest producer of underwear in Dongguan (Guangdong), the main production center in China.
Gogo shut down its operations on January 10, after days of worker protests over non-payment of wages and social benefits. As Hong Kong’s China Labor Bulletin reports, 1,700 people lost their jobs, were forced to pack up their belongings and leave company grounds in a matter of days.
Local media write that more than 3,000 factories have shut down in Dongguan in the first six months of 2022 alone: a prolonged trend, due to the relocation of production to other countries and aggravated by the effects of the pandemic emergency.
Especially thanks to the “zero Covid” policy promoted by Xi Jinping, Chinese GDP grew only 3% in 2022, the second worst figure since 1976. The main international economic institutions expect a rebound of more than 5% this year, far from the record rates recorded by the predecessors of the current supreme leader between 1990 and 2012.
