BEIJING, Dec 19 (Reuters) – China’s business confidence fell to its lowest level since January 2013, a survey by World Economics showed on Monday, reflecting the impact of rising COVID-19 cases on economic activity as the pandemic comes under control. with the abrupt cancellation of many events.
The index fell to 48.1 in December from 51.8 in November, according to World Economics’ survey of sales managers at more than 2,300 companies conducted Dec. 1-16. The index was the lowest since 2013, when the survey began.
The survey results were among the first indicators of how business sentiment has been hit in the world’s second-largest economy, after a sharp easing of strict COVID containment measures on Dec. 7 triggered a still-rising wave of COVID cases in China.
“The survey shows that China’s economic growth rate has slowed quite sharply and may be headed for recession in 2023,” World Economics said.
China’s GDP is expected to grow by just 3% this year, its worst performance in nearly half a century.
The survey showed that business activity fell sharply in December, as the manufacturing and service sector sales managers’ indexes both fell below 50.
“The percentage of companies that claim they are currently being adversely affected by COVID has reached a survey high, with more than half of all respondents now suggesting their operations are being affected in one way or another,” said London-based data provider.
China has recently dismantled some key parts of some of the world’s toughest anti-COVID restrictions and lockdowns. The measures have been championed by President Xi Jinping, but have hurt the economy and sparked popular protests unprecedented in his decade-long rule.
Top leaders and policymakers will focus on stabilizing the economy in 2023 and step up policy adjustments to ensure key targets are hit, according to an agenda meeting that ended on Friday. read more
“It may take at least another quarter for things to turn around,” said Dan Wang, chief economist at Hang Seng Bank China.
“Many small businesses have run out of liquidity, especially restaurants, gyms, hotels and other city services.”
Reporting by Liangpin Gao, Ryan Wu and Joe Cash; Editing by Stephen Coates and Christian Schmollinger
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