China's Economy Faces More Damage as Megacity Chengdu Locks Down




  • In Business
  • 2022-09-02 05:11:20Z
  • By Bloomberg
 

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.

Most Read from Bloomberg

  • Lukoil Chairman Ravil Maganov Dies After Falling From Hospital Window

  • Putin Brings China and India to Russia for War Games Defying US

  • Hong Kong Officials Target End to Hotel Quarantine in November

  • Jeremy Grantham Warns 'Super Bubble' in Stocks Has Yet to Burst

China's economy is bracing for more pain as the lockdown of megacity Chengdu in the west of the country damages business and consumer activity in the area and hurts sentiment more broadly across the nation.

The lockdown of the city of 21 million people, which will last at least four days but could be extended if more Covid cases are discovered, will likely result in a slump in retail and restaurant spending. It could also force factories and companies to shut if staff can't go to work. Chengdu's economy makes up 1.7% of China's national gross domestic product, and is the sixth-largest city after Beijing, Shanghai, Shenzhen, Guangzhou and Chongqing.

The city is the capital of Sichuan province, which has already been hit by severe drought and floods in recent weeks. A power crisis caused by the heatwave forced some factories in the province to shut last month.

The closure of the city "will deal another major blow to the economy when it's already struggling from a barrage of shocks," David Qu, an economist at Bloomberg Economics, wrote in a report. While this won't be as damaging as the Shanghai lockdown, which lasted about two months in the spring, "we do expect a widespread impact on sentiment that amplifies the damage beyond the direct hit to activity," he said.

Chengdu has already been reporting quite weak economic data this year, with retail sales falling in the first seven months of the year, government revenue shrinking and industrial output losing steam. In the first six months of this year, the city's economy expanded just 3%, well below the 13.1% it grew in the same period in 2021.

Chengdu isn't the only major city in China currently under restrictions to control the spread of the virus. Tianjin and Shijiazhuang near Beijing, and Dalian in the northeast have stronger controls in place. A few districts in the technology and manufacturing hub of Shenzhen have also announced tighter Covid controls.

"Covid hotspots are shifting away from several remote regions and cities -- with seemingly less economic significance to the country -- to provinces that matter much more to China's national economy," Nomura Holdings Inc.'s economists led by Lu Ting wrote in a report.

Most Read from Bloomberg Businessweek

  • Mark Zuckerberg's Metaverse Pitch Is Falling Flat

  • Women Who Stay Single and Don't Have Kids Are Getting Richer

  • The Secret Sauce at Hot Chicken Takeover: Its Unique Workforce

  • Russia's Conspiracy-Theory Factory Is Swaying a Brand-New Audience

  • A New Contaminant Found in Popular Drugs Could Cost Big Pharma Millions

©2022 Bloomberg L.P.

COMMENTS

More Related News

Asian Stocks Gain After US Rallies, Yields Slide: Markets Wrap
Asian Stocks Gain After US Rallies, Yields Slide: Markets Wrap

(Bloomberg) -- Asian stocks gained in early trading following a rally in US shares and a surge in Treasuries as weak manufacturing data tamped down fears of ...

Brazil
Brazil's Lula Seeks to Pivot Campaign to Northeast Ahead of Runoff Vote

(Bloomberg) -- Luiz Inacio Lula da Silva huddled in Sao Paulo with his top advisers as the leftist former Brazilian president sought to pivot his campaign to...

Warren Buffett
Warren Buffett's Successor Is Building an $68 Million Berkshire Holding

(Bloomberg) -- Greg Abel, who is in line to eventually succeed Warren Buffett as chief executive officer of Berkshire Hathaway Inc., has been building his...

Credit Suisse
Credit Suisse's Options Worsen as Markets Mayhem Takes a Toll

(Bloomberg) -- Dixit Joshi won't forget his first day as Credit Suisse Group AG's chief financial officer in a hurry. And yet the experience won't have been ...

Samsung Woos US Chip Buyers With Tech Advances, Texas Production
Samsung Woos US Chip Buyers With Tech Advances, Texas Production

(Bloomberg) -- Samsung Electronics Co. announced an aggressive five-year plan to lure US chip buyers with more advanced technology, aiming to produce...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

  • jojoe
    (2022-09-02 19:09:01Z)

    It's terrible.
    فروشگاه پاییز

    REPLY
  • vilobi
    (2022-09-28 14:47:04Z)

    قیمت آون توستر
    بهترین آون توستر
    بهترین آون توستر پارس خزر
    توستر
    قیمت آون توستر
    قیمت توستر
    بهترین آون توستر
    توستر
    قیمت توستر
    قیمت اون توستر
    اون توستر

    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop

    REPLY
  • paeez.shop
    (2022-09-28 14:48:28Z)

    قیمت توستر
    قیمت آون توستر
    توستر
    قیمت اون توستر

    REPLY
  • paeez.shop
    (2022-09-28 14:49:21Z)

    paeez.shop
    paeez.shop
    paeez.shop
    paeez.shop

    REPLY
  • paeez.shop
    (2022-09-28 14:49:56Z)

    Thanks for your post.

    REPLY
  • paeez.shop
    (2022-09-28 14:50:37Z)

    بهترین توستر
    قیمت توستر
    قیمت آون توستر
    قیمت اون توستر

    REPLY
  • paeez.shop
    (2022-09-28 14:51:27Z)

    بهترین آون توستر
    قیمت اون توستر
    قیمت آون توستر
    قیمت توستر
    قیمت توستر
    قیمت آون توستر
    قیمت آون توستر
    قیمت اون توستر

    REPLY
  • paeez.shop
    (2022-09-28 15:10:22Z)

    آون توستر
    آون توستر
    آون توستر

    بخاری
    بخاری
    بخاری


    یخچال
    یخچال
    یخچال

    اسپیکر
    اسپیکر
    اسپیکر

    REPLY

Top News: Business