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China's economic recovery
EconomyChina Economy

China tries to calm economic waters as Covid storm rages

  • Top economic agency bids to shore up market confidence with pledge to stabilise supply chains
  • Finish line ‘now in sight’ as China transitions from zero-Covid policy, officials say

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China’s rapid policy shift away from lockdowns and mass testing has sent coronavirus cases soaring, leading to concerns over drug shortages. Photo: AP
Frank Tangin Beijing
China’s top economic decision-making body has urged manufacturers to maintain stable food and drug production, and to ensure industrial supply chain stability as the country abruptly shifts from Beijing’s stringent zero-Covid policy.

In a lengthy question-and-answer article on the risks and outlook for China’s economy next year, published by the state-run Xinhua on Monday, the Office of the Central Financial and Economic Affairs Commission (CFEAC) said the present difficulties were “temporary and unavoidable”, but that economic and social order would help quicken recovery after the recent reopening.

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“This will unleash huge vigour, and ensure that economic activities continue to circulate and reach their full growth potential,” the commission said. “We must have good management for the transitional period. The finish line is now in sight.”

The comments came as Beijing has been racing to shore up market confidence following the removal of zero-Covid restrictions across the country. The policy U-turn has raised questions about management decisions over public health, with concerns over drug shortages and vaccination rates among the elderly as coronavirus cases spike nationwide.

The office said authorities would ensure adequate medicine supplies for households, monitor key industrial and supply chains, and guarantee supplies of basic necessities at stable prices as its “three key tasks to counter the shocks of short-term spikes in infections”.

On Friday, at the end of an annual economic work conference chaired by President Xi Jinping, officials signalled they would begin to prioritise economic and employment issues.

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Beijing has pledged “overall improvement” in the national economy in 2023, which was widely interpreted as a GDP growth target of at least 5 per cent. Policymakers have promised stabilised economic growth, employment and prices, with the help of more fiscal support and improved monetary policy.

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