China’s corona policy is becoming a risk for the global economy

Beijing China’s steadfast adherence to its strict zero-Covid strategy is increasingly jeopardizing global growth. The risk is “perhaps even greater than the war in Ukraine,” warns Alicia Garcia Herrero, chief economist for Asia-Pacific at French investment bank Natixis. The Chinese strategy means that even in the case of individual infections, entire blocks of flats or neighborhoods are often cordoned off.

Lu Ting, chief China economist at Japanese bank Nomura, fears global markets “still underestimate” the impact of lockdowns in China – arguably because their current focus is on the Ukraine war and US Federal Reserve rate hikes.

But the effects are gradually becoming visible: the International Monetary Fund (IMF) will lower its growth forecast for the global economy on Tuesday, also due to the frequent and far-reaching lockdowns in the world’s second largest economy. This was announced by the head of the IMF, Kristalina Georgiewa.