China is reporting record high COVID-19 infections, leading to a growing number of lockdowns across the nation of 1.4 billion people and prompting fears of an economic slowdown in the world’s second largest economy.
Multiple media outlets are reporting that China is struggling under a resurgence of COVID-19 infections nearly three years after the pandemic first emerged in the Chinese city of Wuhan.
The current outbreak and the speed of its spread are dimming investors’ hopes for China to ease its strict “zero-COVID” policy.
A new wave of lockdowns is imprisoning Chinese citizens in their homes and slowing output at factories across the country, including at the world’s biggest iPhone plant and Tesla’s (TSLA) electric vehicle manufacturing centre.
As a result of the renewed COVID-19 lockdowns, brokerage Nomura cut its China GDP forecast for the fourth quarter of this year to 2.4% year-over-year from 2.8% previously.
China’s government has retained its zero-COVID policy even as the rest of the world tries to live with the respiratory virus.
Chinese stocks are falling across the board on news of the rapidly spreading COVID-19 infections, putting pressure on other securities around the world.