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China’s zero-Covid policy threatens global economic growth, says Bank of Japan policymaker
- China’s zero-Covid curbs may prolong supply-chain woes and intensify inflationary pressures, Japanese official Toyoaki Nakamura cautions
- Remark follows a warning last month by International Monetary Fund head Kristalina Georgieva that China should reassess its approach
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China’s zero-Covid restrictions may heap pressure on the global economy by prolonging supply-chain disruptions and intensifying the impact of inflation, a Bank of Japan (BOJ) policymaker said on Wednesday.
The remark follows a warning last month by International Monetary Fund head Kristalina Georgieva that China should reassess its zero-Covid approach to the pandemic, given the emergence of the highly contagious Omicron variant.
“China’s economy is the world’s market and factory,” BOJ board member Toyoaki Nakamura said in a speech. “There’s a risk that its zero-Covid policy, amid widening Omicron infections, could weigh on the global economy, as well as prolong global supply-chain disruptions and inflationary pressures.”
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Uncertainty over how quickly Japanese companies pass on rising raw material costs to households is also among the risks to the country’s economy, said Nakamura, a former executive at Japanese electronics giant Hitachi.
Nakamura said Japan’s economy is expected to recover as the impact of the pandemic and supply constraints subside.
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But he said the BOJ will maintain its ultra-loose monetary policy to ensure the economy strengthens enough to accelerate inflation to its 2 per cent target.
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