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| PhotoCredit/Economist |
Rarely have plans in China fallen apart so swiftly, so publicly. On
January 12th the leaders of Hubei declared that the province’s GDP would
grow by 7.5% this year. They also vowed to make the province a stronger
link in high-tech supply chains.
They made no mention of a mysterious
new virus that was causing pneumonia and spreading fast through the
cities and towns under their watch. But less than two weeks later its
scale was too big to ignore. Under intense pressure to act, they placed
the entire province under quarantine, hemming in 60m people and
rendering their flashy economic targets almost certainly unreachable
this year. Their focus instead shifted to stopping the illness and
keeping people supplied with necessities.
The lurch from confidence to anxiety has echoed throughout China. In the months leading up to the coronavirus outbreak, the stockmarket had rallied. Businesses were upbeat about their prospects this year, not least because China and America had finally reached a deal in their long-running trade war. But over the past two weeks, as the government has begun a full-scale fight against the epidemic, optimism has crumbled.
Share prices in mainland China have fallen by 10% since January 20th. Factories and offices, already shut for the new-year holiday, were supposed to reopen in recent days but many have stayed shut. Most provinces have ordered them to remain idle until February 10th, if not longer. Poultry farmers have warned that their chickens might starve because roadblocks have snarled their feed supplies. Businesses have started dipping into their cash reserves.
The lurch from confidence to anxiety has echoed throughout China. In the months leading up to the coronavirus outbreak, the stockmarket had rallied. Businesses were upbeat about their prospects this year, not least because China and America had finally reached a deal in their long-running trade war. But over the past two weeks, as the government has begun a full-scale fight against the epidemic, optimism has crumbled.
Share prices in mainland China have fallen by 10% since January 20th. Factories and offices, already shut for the new-year holiday, were supposed to reopen in recent days but many have stayed shut. Most provinces have ordered them to remain idle until February 10th, if not longer. Poultry farmers have warned that their chickens might starve because roadblocks have snarled their feed supplies. Businesses have started dipping into their cash reserves.
Restaurants and hotels have been hit especially hard
because few people anywhere in China, not just Hubei, dare venture out.
In one interview that was shared widely on social media before being
censored, Jia Guolong, founder of Xibei, a popular restaurant chain,
said that if the lockdown persisted for a few more months, vast numbers
could lose their jobs. “Wouldn’t that be an economic crisis?”.
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