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Corona pandemic: Omicron threatens China’s economy

Corona pandemic: Omicron threatens China's economy

“Ayis” are hard to come by in Shanghai. The services of domestic help, whose Chinese name literally means “aunt”, are in such demand that their hourly wages in the metropolis, which has a population of 25 million, rose by a third last year at temporary employment agencies. The rental prices in the inner city locations are also climbing to levels that are otherwise only reached in the best areas of London and New York. 90 square meter apartments for 4,000 euros a month went away without a single visit, realtors report: “Anyone who can afford it in China moves to Shanghai.” The omicron variant of the corona virus has made the city really attractive for the Chinese . Since the danger of a mass spread of the easily transmitted virus variant in the huge country can no longer be denied, lockdowns and mass tests have threatened to massively impair the freedom and well-being of citizens in China’s megacities. Shanghai, traditionally China’s most liberal city anyway, has so far reacted comparatively mildly to isolated outbreaks by Chinese standards and has only quarantined residents of individual residential complexes if one of the often hundreds of neighbors has been classified as a suspected corona case. That was the case at a bubble tea shop on Yuyuan Street on Thursday night after authorities reported five new cases.

Containers take detours with consequences

The fact that two years after the outbreak of the corona virus in Wuhan in China, it is considered a locational advantage if the risk is somewhat lower, being roused from sleep by party workers in protective suits at night and then being locked up in a centralized hotel quarantine for weeks: This makes the global economy fear for the Development of the country, which is no longer just a workbench, but has long been the largest market, especially for German companies. After Xi’an, which has 13 million inhabitants, the 14 million city of Tianjin, not far from Beijing, is now also under quarantine over a large area after 40 cases of infection were registered there by Wednesday. The European aircraft manufacturer Airbus has settled in the port city, as have Siemens and the German automotive suppliers Schaeffler and Mahle. The Japanese carmaker Toyota shut down operations in its plants on Monday because its suppliers were no longer supplying parts – their employees were queuing for the mass tests ordered by the authorities.

Knowledge has never been more valuable Read F+ now for free for 30 days and get access to all articles on FAZ.NET. READ F+ NOW Volkswagen, whose sales in its key market, China, are already falling rapidly due to a shortage of semiconductors, has closed two plants in Tianjin. A visitor to the city has meanwhile brought the Omicron variant to the northeastern port city of Dalian, which has seven million inhabitants and, like Tianjin, is one of the 20 largest container transshipment centers in the world. Freighters from all parts of the world are diverting to Shanghai, which causes traffic jams and delays in the transport of goods for days.

No flights from America to China

According to estimates by bank economists, the Chinese economy grew by just 3.6 percent in the fourth quarter of last year; Beijing’s statistical office announced the official number on Monday. Omicron, against which the Chinese vaccines are hardly effective, could weaken the economy much more, believes Goldman Sachs and on Wednesday cut its forecast for China’s growth by 0.5 points to 4.3 percent – with bank economist Hui Shan a looser one The monetary policy of China’s central bank and the government’s economic stimulus programs worth billions have already been factored into this scenario. Although the number of omicron cases is tiny compared to, say, the United States, a nationwide lockdown in China no longer seems impossible. With the Winter Olympics starting in Beijing on February 4th, this only increases the pressure on the government to prove to the world the superiority of its zero-Covid strategy.

Beijing has shown how unfazed by criticism of the draconian measures by canceling 70 flights from the US to China. Washington has condemned the fact that for the first time since the early 1980s there have been practically no scheduled flights from the United States to the People’s Republic. Traveling to the capital Beijing, however, is difficult even from Shanghai. It has had a “star” since Thursday evening – and is considered a risky city.

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