China due to the growth of the number of sick strain “Delta” tightened the fight against a pandemic. In an interview with CNBC, the head of the InDependent Strategy investment company David Roche called the step of the Chinese authorities dangerous not only for the country’s economic growth, but also for world trade.
The National Health Commission of the People’s Republic of China reported on the new 134 cases of COVID-19 on the mainland of China – there were no more sick on the day from January 2021. Chinese state-owned media bind out a pandemic outbreak with the spread of a more infectious “delta” -variant virus. To keep the spread of infection, the government organized mass testing and limited movement in large cities, including Beijing.
“To restore the economy at the moment it would be more useful to remove coronavirus restrictions. In China, for obvious reasons, until it does not work. Therefore, the industries must come to terms with the fact that economic costs will arise not only by the Chinese, but in all the world, “said David Rosh.
Some economists are concerned with the aggressive methods of China in the fight against the pandemic, although this approach helped the country quickly block previous outbreaks of morbidity. However, the “delta” -variant will keep it harder, and this will affect the restoration of China’s economy.
Analysts from the Australian Bank Anz suggested that if Chinese markets would not resume work in full by mid-August or early September, the country would have to revise the GDP forecast for 2021. David Rosh expects that China’s annual growth in the third quarter will slow down to 2-3 percent compared with 7.9 percent in the spring of this year.
In addition, the restrictions in China will violate the global supply chains. According to Rosha, it can hardly hit the global economy – the cost of some goods will join and increase inflationary expectations.
In addition, the analyst warned China about the problems in the stock market due to state pressure on large companies – investors are not in the desire to invest in technological firms and educational projects.
David Rosh believes that, despite the economic downturn, China is one of the first to win COVID-19 and will be released on the trajectory of long-term growth – albeit not so sharp as the world is used to expect from him.