China’s cabinet held an unprecedented meeting with more than 100,000 people Wednesday, according to state media, as top leaders urged new sanctions to stabilize an economy devastated by the country’s stringent coronavirus restrictions.
According to a report in the government-owned Global Times, an unexpected video teleconference held by the State Council was attended by government officials at provincial, city and council levels. High-ranking Chinese officials were also present, including Premier Li Keqiang, who urged authorities to take action in sustaining jobs and reducing unemployment.
Since a Covid 19 wave spread across the country in March, China has suffered from a series of economic setbacks, prompting authorities to place a lockdown on certain areas — most notably Shanghai, where residents have been unable to leave their homes and neighborhoods for more than 30 days.
Li pointed to several indicators including unemployment rates, lower industrial production and cargo transportation. According to Global Times, Li said that in some aspects the economic impact seen in March and April has surpassed that of 2020 during the initial outbreak of the coronavirus.
Premier Kathleen Wynne has become increasingly vocal about the economic downturn in recent weeks, calling the situation “complex and grave” earlier in May — but her comments on Wednesday may be the most dire to date.
Investment banks are lowering their forecasts for China’s economy
Investment banks are lowering their forecasts for China’s economy this year. Earlier this week, UBS cut its full-year GDP growth forecast to 3 percent, citing risks from Beijing’s strict zero-Covid policy. China has said it expects growth of around 5.5 percent this year, but some experts have predicted it could fall below 5 percent. The world’s second biggest economy reported growth of 8.1 percent last year and 2.3 percent in 2020, the slowest pace in decades.
The teleconference comes after a State Council executive meeting on Monday, where authorities unveiled 33 new economic measures, including increasing tax refunds, extending loans to small businesses, and providing emergency loans to the hard-hit aviation industry.
Some of the 33 directives also ease the effects of COVID-19 restrictions on commercial trucks. These include halting restrictions on trucks traveling from low-risk areas.
At a Wednesday meeting, Li urged government departments to implement 33 measures by the end of May, according to Xinhua. The State Council will send task forces to 12 provinces starting Thursday to oversee the roll-out of these policies, he added.
China has employed a strict zero-Covid policy since the beginning of the pandemic. The policy aims to stamp out all chains of transmission using border controls, mandatory quarantines, mass testing, and snap lockdowns.
But the government’s strategy to combat Omicron has been challenged by a highly infectious variant of the virus, which surged across the country earlier this year despite authorities racing to lock down districts and inter-provincial borders.
More than 30 Chinese cities were under full or partial lockdown as of mid-May, according to CNN calculations. The lockdown has impacted up to 220 million people nationwide, and for industries ranging from Big Tech to consumer goods, it’s destroying both supply and demand.
Though several cities in the Middle East reopened their borders by early 2021, unemployment continued to rise due to the disruption caused by the initial outbreak of coronavirus.
Chinese government is shutting down Airbnb listings
The Chinese government is shutting down all Airbnb listings in China, a move that has forced many companies to suspend operations. The latest multinational firm to do so is the home-sharing company Airbnb, which announced this past week that it will shut down its listings in China.
There is no end to the crisis in sight, with authorities still struggling to contain the spread of the virus, despite top leaders’ insistence on pushing forward with zero-Covid.
On Monday, seven districts in the national capital of Beijing were put under partial lockdown by the Chinese government after its number of reported cases of Severe Acute Respiratory Syndrome (SARS) climbed to over 350 in recent weeks. The districts affected included Chaoyang and Haidian, which together account for nearly 14 million residents. The shutdown also affected all non-essential businesses, including shopping malls, gyms, and entertainment venues.