China's Premier issues warning on economic risks amid fresh COVID outbreak in Shanghai

As China is hit by a massive COVID outbreak for two years, Chinese Premier Li Keqiang issued a third warning in less than a week over the weak economic situation in China. Addressing a forum held with local government officials on April 11, Keqiang stated that the current economic situation required an "increase in sense of urgency" and expedite implementation of economic reform policies. He also raised concern over the impact of the brutal lockdowns on the businesses, leading to disrupted production and spending.

Keqiang, however, urged all localities and government departments to "remain confident" while being highly vigilant about unprecedented challenges and rising downward pressure. He added, that the authorities must resolutely respond to unforeseen events, Global Times reported. The Chinese Premier's remark comes after economic analysts flagged that the sudden rise in COVID-19 infections and subsequent stringent lockdown measures have put downward pressure on pillars of Beijing's economy, especially on investment and consumption.

Li Keqiang had earlier warned the entrepreneurs of "unforeseen factors" that contributed to the uncertainties and challenges to stabilising the country's economy. His concerns were echoed by the Chinese Minister of Industry and Information Technology Xiao Yaqing who pointed out that China was facing difficulties in logistics and rising commodity prices.

China's economic growth is still weak

China's economic growth has edged up to a weak 4.8% over a year as industrial cities remain shut down to fight the worst COVID rise in two years. This is largely threatened global trade and manufacturing. Growth in the world’s second-largest economy crept up from the previous quarter’s 4% following a slump triggered by tighter controls on the use of debt by China’s vast real estate industry, government data showed Monday. Compared with the previous quarter, as other major economies are measured, growth slowed to 1.3% from 1.4%. “More pain will come” in the current quarter, Iris Pang of ING said in a report. “Further impacts from lockdowns are imminent," the Associated Press reported.

With a daily caseload of more than 2,000 cases, most of China's largest city, Shanghai, has remained under strict lockdown. The largest financial hub of the mainland has remained under huge pressure to contain the outbreak, which is the biggest since the inception of COVID-19 in December 2019. Stringent measures owing to the unprecedented surge have led to widespread frustration among 26 million citizens of Shanghai as they are struggling to access daily essentials, including medical supplies.

(Image: AP/PIXABAY)