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Chinese Economy is Slowing Down Due to Delta Variant Outbreaks

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The activity of Chinese companies has declined this month due to outbreaks of the Delta variant of the coronavirus. However, the industry continued to grow, but it was very minimal.

 

Activity in the construction and service sectors declined, partly because of restrictions on Chinese travel. The Chinese consumer was also a bit more conservative.

The Chinese statistical office reported a reading of 50.1 for the so-called purchasing managers index for the industry and 47.5 for the rest of the companies. A reading above 50 indicates increasing activity; below that, it decreases. A combined business-wide index came in at 48.9.

Last month, China imposed strict measures to limit outbreaks of the Delta variant. For example, travel bans were imposed, and massive testing was carried out. For example, a busy container terminal in one of the largest ports was closed for more than a week after infection. In total, more than fifty cities and seventeen provinces had to deal with measures.

In addition to the corona outbreaks, the Chinese economy is also suffering from weaker domestic demand. Furthermore, the Chinese government’s strict approach to various sectors is also reducing growth.

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