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AlwaysFree: Widespread COVID-19 Outbreak Puts China’s Consumer Recovery At Risk

Author: SSESSMENTS

A new COVID-19 outbreak now covers the broadest geographical area in China since the beginning of the pandemic in late 2019, resulting in doubt in consumers’ spending and tourism during the peak summer holiday. While China’s economy has largely recovered from the pandemic, some sectors, including consumption and the service industry, have yet to catch up with the gains in manufacturing and exports.

Cases involving the highly contagious COVID-19 Delta variant have been reported to nearly half of 32 provinces in the country. At least 46 cities have advised residents against travelling unless for important purposes. The current outbreak has shut down all tourist attractions in Hunan, Jiangsu, and Shanxi provinces. Scheduled airline seat capacity dropped 9.8% this week from a week earlier.

Qingdao International Beer Festival was called off early, while the Torch Festival in Yunnan province was cancelled. More than a dozen music festivals in many cities have been cancelled or postponed. The outbreak has reached Beijing and returned to Wuhan, where the virus was first reported in late 2019.

Analysts said the new outbreak posed a downward risk to the economy in the third quarter, especially in retail sales. They expect retail sales to shrink about 0.2% month-on-month in July and August, with full-year growth likely falling short of the previous forecast of 12%. Exports and property and infrastructure investment are also expected to cool down in the second half of the year.

Tags: All Products,AlwaysFree,Asia Pacific,China,English,NEA

Published on August 4, 2021 2:35 PM (GMT+8)
Last Updated on August 4, 2021 2:35 PM (GMT+8)