Coronavirus: Guangzhou outbreak leaves small firms reeling amid fears of possible ‘spillover effects’ on nearby cities
- Coronavirus containment measures, including lockdowns and service suspensions, have crippled business operations for many firms in Guangdong
- Analysts say the outbreak could wipe up to a percentage point off economic growth in Guangzhou city, but the effect on China’s broader economy is forecast to be small
Strict coronavirus containment measures in Guangdong are heaping pressure on local businesses still finding their feet after the first wave of the pandemic swept through the province last year, threatening to wipe up to a percentage point off local growth, but posing only a minor threat to China’s overall economy.
Lockdown measures and service suspensions have been imposed in some parts of the province since late May, after a 75-year-old woman living in Guangzhou was found infected with the Covid-19 Delta variant, first found in India.
Business closures in Guangdong’s main cities have raised concerns about possible knock-on effects in the broader economy, as the province is one of China’s main economic growth engines and a major trading hub.
02:11
Guangzhou tightens Covid-19 controls as mass tests expose more cases in Chinese city
The outbreak is also a test for Li Xi, the Communist Party secretary of Guangdong, who is believed to be a candidate for promotion at the 20th party congress in 2022.
“Economic activity in Guangzhou has indeed dropped to its lowest levels since early 2020,” said Peng Peng, executive chairman of the Guangdong Society of Reform, a think tank connected to the provincial government.
