BEIJING — Wang Jian is anxious to get back to work teaching basketball to children now that China has lifted anti-COVID-19 restrictions. But his gym in the eastern city of Shenyang has been closed for a month because all its coaches are infected.
Andy Wong, Associated Press
A man and a child wearing face masks walk by shuttered stores that would be selling souvenirs in Qianmen, a popular tourist spot on Jan. 3 in Beijing.
The most optimistic forecasts say China’s business and consumer activity might revive as early as the first quarter of this year. But before that happens, entrepreneurs and families face a painful squeeze from a surge in virus cases that has left employers without enough healthy workers and kept wary customers away from shopping malls, restaurants, hair salons and gyms.
“I hope the situation will turn around in March or April with no more COVID shocks,” said Wang, 33, who went without a paycheck for four months when the gym closed during virus outbreaks. “If parents worry about possible reinfection, they simply won’t send their children for training.”
The abrupt decision by President Xi Jinping’s government to end controls that shut down factories and kept millions of people at home will move up the timeline for economic recovery, but might disrupt activity this year as businesses scramble to adapt, forecasters say.
“This will be a bumpy process,” said Dong Chen, chief Asia economist for Pictet Wealth Management.
“People still are struggling with infections, but we think this could be temporary,” Chen said. “Broadly, we think this is a positive surprise.”
The decision to accelerate China’s reopening is a boost for the global economy at a time when activity in the United States and Europe is weakening after repeated interest rate hikes by central banks to cool surging inflation.
It is likely to help revive auto sales and propel demand for imported consumer goods, oil and food in China, one of the biggest global markets. Countries including Thailand with big tourism industries look forward to an influx of Chinese travelers.
The World Bank and private sector forecasters have cut estimates of China’s economic growth last year to as low as 2.2% due to the infection spike that started in early October and challenged Beijing’s “zero-COVID” goal of isolating every case. The International Monetary Fund expects a recovery to 4.4% this year, but that still would be among the lowest levels of the past three decades.
“Zero-COVID” kept China’s infection numbers low but shut down Shanghai and other industrial cities last year for two months, disrupting manufacturing and shipping. Business groups said global companies were shifting investment plans away from China because rules that required visitors from abroad to quarantine for a week kept executives from visiting.
The ruling party promised Nov. 11 to reduce the cost and disruption. A series of surprise announcements rolled back travel and other restrictions that health experts and economists had expected to persist through mid-2023.
On Sunday, Beijing began allowing travelers to enter China without quarantines. The government has yet to say when China will resume issuing tourist visas.
“The sudden, chaotic way in which pandemic policies have been changed means that growth will be hampered in new ways,” Daniel H. Rosen, Charlie Vest and Rogan Quinn of Rhodium Group said in a report. High numbers of infections make it “realistic to expect production to be hampered for a substantial part of 2023.”
Forecasters say the economy probably contracted in the final quarter of 2022 as virus case numbers rose and retail spending and trade fell.
Exports shrank after American and European consumer demand was depressed by interest rate hikes. That forces Chinese planners to make up for lost foreign sales by trying to boost consumer demand.
Chinatopix via AP
An employee works in a weaving factory on Jan. 6 in Hangzhou in eastern China's Zhejiang Province. Forecasters say the abrupt decision by President Xi Jinping's government to end controls that shut down factories and kept millions of people at home will move up the timeline for economic recovery, but might disrupt activity this year as businesses scramble to adapt.
“The key to rapid economic recovery” is to “convert income into consumption and investment as much as possible,” one of the country’s most prominent financial figures, Guo Shuqing, the ruling party secretary for the central bank, told the official Xinhua News Agency.
Informal measures show public and business activity improving but weak.
This month’s subway passenger numbers in 10 large cities recovered to 55-60% of the level a year ago, up from 30-35% last month, according to Macquarie Group. Roads are growing more congested.
But hotels, restaurants and other businesses hoping for a boost from this month’s Lunar New Year holiday, the busiest tourism season, suffered a blow when some local authorities appealed to migrant workers to skip traditional visits to their hometowns that might spread infections.
The operator of the 12-room Oriental Hotel in the eastern city of Hefei, who would give only his family name, Huang, said he is losing $550 a month. His occupancy rate is 20%, well below the 50% needed to break even.
“People stay home and maybe they worry about possible reinfection,” Huang said. “If it stays the same for another year, I will give up running the hotel.”
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Uncredited - staff, AP
A man lifts an empty casket onto a van as relatives in traditional Chinese funeral attires rest near the Gaobeidian Funeral Home in northern China's Hebei province, Thursday, Dec. 22, 2022. Bodies from Beijing, a two-hour drive away are appearing at the Gaobeidian funeral home, because similar funeral homes in Beijing were packed.
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Uncredited - staff, AP
A relative in traditional Chinese funeral attire stands near funeral wreaths at the Gaobeidian Funeral Home in northern China's Hebei province, Thursday, Dec. 22, 2022. Bodies from Beijing, a two-hour drive away are appearing at the Gaobeidian funeral home, because similar funeral homes in Beijing were packed.
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Uncredited - staff, AP
Relatives burn paper offerings for their dead relative at the Gaobeidian Funeral Home in northern China's Hebei province, Thursday, Dec. 22, 2022. Bodies from Beijing, a two-hour drive away are appearing at the Gaobeidian funeral home, because similar funeral homes in Beijing were packed.
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Uncredited - staff, AP
Family members light fireworks as offerings for their deceased relative at the Gaobeidian Funeral Home in northern China's Hebei province, Thursday, Dec. 22, 2022 Bodies from Beijing, a two-hour drive away, are appearing at the Gaobeidian funeral home, because similar funeral homes in Beijing were packed.
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Uncredited - staff, AP
Visitors to the Baigou New Area Aerospace Hospital stand near the words "Emergency Clinic" in Baigou, in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Uncredited - staff, AP
A hospital worker in protective gear disinfects the ward of an emergency department of Baigou New Area Aerospace Hospital in Baigou in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Dake Kang - staff, AP
A patient rests in a wheelchair at the emergency department of the Langfang No. 4 People's Hospital in Bazhou city in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Dake Kang - staff, AP
Relatives gather near the beds of sickened patients at the emergency department of the Langfang No. 4 People's Hospital in Bazhou city in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Uncredited - staff, AP
A hospital worker prepares to perform tests after placing electrodes to the chest of a man sprawled out on a stretcher outside the emergency ward at the Langfang No. 4 People's Hospital in Bazhou city in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Uncredited - staff, AP
A sickened patient is moved onto a gurney at the emergency department of the Langfang No. 4 People's Hospital in Bazhou city in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Dake Kang - staff, AP
Relatives attend to a sickened patient in a wheelchair at the emergency department of the Langfang No. 4 People's Hospital in Bazhou city in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
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Uncredited - staff, AP
An ambulance prepares to transfer a patient in critical care to other hospitals due to overcapacity at the emergency department of the Langfang No. 4 People's Hospital in Bazhou city in northern China's Hebei province on Thursday, Dec. 22, 2022. As China grapples with its first-ever wave of COVID mass infections, emergency wards in the towns and cities to Beijing's southwest are overwhelmed. Intensive care units are turning away ambulances, residents are driving sick relatives from hospital to hospital, and patients are lying on floors for a lack of space.
