China reported a record number of Coronavirus infections on Thursday. China's leadership has stuck by its zero-COVID policy, which includes some of the strictest restrictions in the world, saying it is necessary to save lives and prevent the medical system from being overwhelmed.
China Reports Record Number of Covid-19 Cases on Thursday
China reported a record high number of COVID-19 infections on Thursday, with cities nationwide imposing localised lockdowns and other curbs that are darkening the outlook for the world's second largest economy.
The surge in the number of infections, at record highs not seen since an outbreak in Shanghai earlier this year, is diminishing investors' hopes that China will soon ease the rigid zero-COVID policy that, along with a downturn in the property market, is battering the economy.
The restrictions have also extracted a toll on China's increasingly frustrated residents, as well as output at factories including the world's biggest iPhone plant, which has been rocked by violent clashes between workers and security personnel in a rare show of dissent.
"We believe reopening is still likely to be a prolonged process with high costs," Nomura analysts wrote in a note. The brokerage cut its GDP forecast for the fourth quarter to 2.4% year-over-year from 2.8%, and also cut its forecast for full-year growth to 2.8% from 2.9%.
China's leadership has stuck by its zero-COVID policy, which includes some of the strictest restrictions in the world, saying it is necessary to save lives and prevent the medical system from being overwhelmed.
However, in an acknowledgement of the pressure on the economy, the cabinet said China would use timely cuts in bank cash reserves and use other monetary policy tools to make sure there is enough liquidity, state media reported on Wednesday, a hint that a cut in the reserve requirement ratio (RRR) may be coming soon.