“Resurging cases of the COVID-19 virus and the austere measures imposed by regional authorities may hurt consumption and service sectors of China’s economy in the near term,” reduce employment and slow logistics, Chinese online media outlet, Yicai.com reported, citing economists.
Read: China’s GDP forecast revised down sharply to 2.3% QoQ in Q3 – Goldman Sachs
Key quotes
“About 200 areas in more than a dozen provinces have been classified as medium or high-risk zones as of Aug. 8, while 31 provinces issued warnings against long-distance travel, which will severely damage tourism.”
“Some cities such as central Zhengzhou are imposing restrictions unseen even during last year’s worst period of the outbreak.”
“China’s exports may play a reduced role in aiding recovery this time as western nations have adopted looser restrictions, which boost service consumption and may reduce the demand for Chinese goods.”
“The government may need to increase policy support, led with fiscal measures including greater investments and bond issuances.”
USD/CNY reaction
Amid renewed concerns on the Chinese economic growth and upbeat inflation figures, USD/CNY drops 0.10% on the day, trading at 6.4758, as of writing.