China’s economic growth rate has hit its lowest level in more than two years, reflecting the enormous cost to the economy of the government’s dynamic epidemic prevention policies in the world’s second-largest economy.
Gross domestic product (GDP) grew 0.4% year-on-year in the April-June period, the National Bureau of Statistics said on Friday. It was the worst performance since the outbreak of the new crown epidemic in the first quarter of 2020, when GDP contracted by 6.9%, when the central Chinese metropolis of Wuhan became the first city in the world to be locked down to contain the spread of the epidemic. Economists polled by The Wall Street Journal had forecast a 0.9% growth in the second quarter.
The magnitude of the economic slowdown in the second quarter underscores the negative impact of strict lockdowns. In order to combat the epidemic, Shanghai, the most economically developed city in China, implemented strict lockdowns. Many residents stayed home for two months, and many businesses were closed.
The lockdowns aren’t limited to economically developed coastal areas: Auto factories have been shut down following the outbreak in Jilin province in northeastern China, agricultural activities have been disrupted, and other towns have all but shut down because of the outbreak. Strict lockdowns have dampened consumer demand and business activity, hitting retail and industrial production hard.
…
