The unexpected Council of State videoconference was attended by provincial, municipal and municipal officials, according to a report in the government-owned Global Times. Senior Chinese officials were also present, including Premier Li Keqiang, who urged authorities to take steps to maintain jobs and reduce unemployment.
He said that in some respects the economic impact observed in March and April has exceeded that of 2020 during the initial outbreak of the coronavirus, according to the Global Times. He pointed to several indicators, such as unemployment rates, lower industrial production and freight transport.
The Prime Minister has spoken out more and more about the economic downturn in recent weeks, calling the situation “complex and serious” in early May, but Wednesday’s comments may paint the saddest picture so far. Investment banks are cutting their forecasts for China’s economy this year. Earlier this week, UBS cut its year-on-year GDP growth forecast to 3%, citing the risks of Beijing’s strict Covid zero policy. China has said it expects growth of around 5.5% this year. The world’s second-largest economy grew by 8.1% last year and 2.3% in 2020, the slowest pace in decades.
33 new economic measures
The conference call comes after an executive meeting of the Council of State on Monday where the authorities presented 33 new economic measures, such as an increase in tax refunds, the extension of loans to small businesses and the granting of Emergency loans to the aviation industry, severely affected, according to the Xinhua government-owned news channel. .
Several of the 33 policies also alleviate Covid’s limitations, such as lifting restrictions on trucks traveling from low-risk areas.
At Wednesday’s meeting, Li urged government departments to implement these 33 measures by the end of May. The State Council will send working groups to 12 provinces starting Thursday to oversee the implementation of these policies, he added, according to Xinhua.
During the pandemic, China has adhered to a strict Covid zero policy aimed at eliminating all transmission chains through border controls, mandatory quarantines, mass testing and rapid blockades.
But this strategy has been challenged by the highly infectious variant of Omicron, which rose nationwide earlier this year despite authorities rushing to close districts and interprovincial borders.
As of mid-May, more than 30 cities were under total or partial blockade, affecting up to 220 million people nationwide, according to CNN estimates. For industries ranging from Big Tech to consumer goods, this is destroying both supply and demand.
Although some of these cities have reopened since then, the impact of this disruption is still being felt, with unemployment at its highest level since the initial coronavirus outbreak in early 2020.
Many companies have been forced to suspend operations, such as carmakers Tesla and Volkswagen. Airbnb is the latest multinational company to withdraw, and the housing-sharing company announced last week that it would close its deals in China.
There is no clear end in the face of the crisis, with authorities still struggling to contain the spread of the virus and top leaders insisting on moving forward with zero-Covid.
On Monday, the national capital Beijing, which has also seen an increase in cases in recent weeks, saw seven districts partially blocked, affecting nearly 14 million residents. The city’s two largest districts, Chaoyang and Haidian, were included, forcing the closure of all non-essential businesses, including shopping malls, gyms and entertainment venues.