Categories: Economy

Shanghai lockdown could shave off about 2% of China’s total GDP

<p>
<strong>The ongoing stringent lockdown in the Chinese financial hub of Shanghai following the resurgence of Covid 19 infections will severely affect the country’s overall gross domestic product (GDP). Analysts said that it could shave off 1.5 per cent to 2 per cent from China GDP even as Beijing assured that timely and necessary measures would be taken to support the economy.</strong></p>
<p>
The share of Shanghai's economy in China's total GDP amounts to more than 3.5 per cent. According to Statista, in 2021, GDP of Shanghai municipality stood at about 4.32 trillion yuan.</p>
<p>
China had set a GDP growth target of 5.5 per cent for 2022 after registering an expansion of 8.1 per cent in 2021.</p>
<p>
The country’s central bank– People’s Bank of China (PBOC) is already looking at a host of monetary policy measures including reduction in key policy rates.</p>
<p>
<strong>Also read: <a href="https://www.indianarrative.com/world-news/hunger-begins-to-stalk-shanghai-amid-stringent-covid-restrictions-163294.html">Hunger begins to stalk Shanghai amid stringent Covid restrictions</a></strong></p>
<p>
“The authorities in China are aware of the problem, there are concerns over slowing economic growth. Major steps will be taken to support the economy and we can expect more money to pour into the system,” Aravind Yelery, senior research fellow at the Peking University and visiting faculty at Fudan University in Shanghai told India Narrative.</p>
<p>
Liquidity infusion into the system will be critical. The reserve requirement ratio or the minimum quantum of reserves that banks are required to hold is set to be brought down, so that they can have more money to lend. Besides, the government can come out with tax relief measures too – particularly to provide cushion to the small and medium enterprises. Many of the SMEs– the “mainstay of the market and the main source of jobs” — as China’s Vice-Premier Liu He described, face closure amid the uncertainty.</p>
<p>
“We estimate that Shanghai will suffer a 6 per cent GDP loss if the current lockdowns persist in this month alone; that’s a 2 per cent GDP loss for the whole of China,” <a href="https://www.hellenicshippingnews.com/chinas-latest-covid-symptom-a-loss-of-gdp-growth-2/">Hellenic Shipping News</a> said.</p>
<p>
Home to about 25 million people, Shanghai—now the Covid 19 hotspot, has been under lockdown. The lockdown which was to end on April 5 has now been extended leading to uncertainty and panic among the citizens.</p>
<p>
The stringent lockdown and China zero Covid approach have caused concern among the business community.</p>

Mahua Venkatesh

Mahua Venkatesh specialises in covering economic trends related to India and the world along with developments in South Asia.

Recent Posts

New Zealand Foreign Minister arrives Kathmandu on two days’ visit, ahead Everest Day

New Zealand's Deputy Prime Minister and Foreign Minister Winston Peters has arrived Kathmandu on his…

6 hours ago

Indian, Mongolian armies to hold 17th ‘Nomadic Elephant 2025’ joint exercise in Ulaanbaatar

The Indian Army and the Mongolian Armed Forces will commence the 17th edition of their…

8 hours ago

“Never thought this would happen…”: Pandi Ram Mandavi on receiving Padma Shri for wood craft

Pandi Ram Mandavi, a renowned artist from Bastar, Chhattisgarh, was conferred the Padma Shri award…

8 hours ago

Taiwan slams China’s Cross-Strait summits as ‘United Front Lectures,’ shuns events in Beijing

Taiwan's Mainland Affairs Council (MAC) criticised China on Wednesday for organising two summits for Taiwanese…

10 hours ago

ETGE slams UNWTO official for endorsing China’s tourism drive amid ongoing Uyghur genocide

The East Turkistan Government in Exile (ETGE) vehemently denounces Mr. Francesco Frangialli, the Honorary Secretary-General…

10 hours ago

US lawmakers urge AI Safety Institute to counter China’s growing AI threat

Chairman John Moolenaar and Ranking Member Raja Krishnamoorthi of the House Select Committee on the…

11 hours ago