100,000 Chinese officials attend emergency meeting to revive Covid-hit economy

The unexpected State Council video conference call brought together officials from the provincial, municipal and municipal levels, according to a report by the government-owned Global Times. Senior Chinese officials were also present, including Premier Li Keqiang, who urged authorities to take action to maintain jobs and reduce unemployment.

Li said that in some aspects, the economic impact seen in March and April exceeded that of 2020 during the initial outbreak of the coronavirus, according to Global Times. He pointed to several indicators, including unemployment rates, declining industrial production and freight transport.

The Prime Minister has become increasingly vocal about the economic downturn in recent weeks, calling the situation “complex and serious” earlier in May – but Wednesday’s comments may paint the darkest picture yet.
Investment banks are cutting their forecasts for the Chinese economy this year. Earlier this week, UBS lowered its full-year GDP growth forecast to 3%, citing risks from Beijing’s strict zero-Covid policy. China said it expects growth of around 5.5% this year. The world’s second-largest economy grew 8.1% last year and 2.3% in 2020, the slowest pace in decades.

33 new economic measures

The teleconference comes after an executive meeting of the Council of State on Monday during which the authorities unveiled 33 new economic measures, including increasing tax refunds, granting loans to small businesses and granting loans emergency response to the hard-hit aviation industry, according to state media Xinhua. .

Several of the 33 policies also ease Covid restrictions – such as lifting restrictions on trucks traveling from low-risk areas.

At Wednesday’s meeting, Li urged government departments to implement the 33 measures by the end of May. The State Council will send task forces to 12 provinces from Thursday to oversee the rollout of these policies, he added, according to Xinhua.

How China's lockdowns are weighing on global businesses

Throughout the pandemic, China has adhered to a strict zero Covid policy which aims to eradicate all chains of transmission using border controls, mandatory quarantines, mass testing and instant lockdowns.

But that strategy has been challenged by the highly contagious variant of Omicron, which swept across the country earlier this year despite authorities racing to lock down districts and inter-provincial borders.

As of mid-May, more than 30 cities were under full or partial lockdown, affecting up to 220 million people nationwide, according to CNN calculations. For industries ranging from Big Tech to consumer goods, this destroys both supply and demand.

Although some of those cities have since reopened, the impact of that disruption is still being felt, with unemployment hitting its highest level since the initial coronavirus outbreak in early 2020.

Many companies have been forced to suspend operations, including automakers Tesla and Volkswagen. Airbnb is the latest multinational to pull out, with the home-sharing company announcing last week that it would close its listings in China.

There is no clear end to the crisis in sight, 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 cases rise in recent weeks – saw seven districts placed under partial lockdown, affecting nearly 14 million people. The city’s two largest districts, Chaoyang and Haidian, were included, forcing the closure of all non-essential businesses, including malls, gyms and entertainment venues.

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