China’s Covid Zero Makes Growth Target Hard to Hit, Nomura Says
A worker assists residents of a neighborhood placed under lockdown due to Covid-19 in Shanghai, on March 10.
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China’s Covid Zero strategy will make it harder for Beijing to hit its gross domestic product growth target of about 5.5% for 2022, as the costs of the policy rise and its benefits wane, according to Nomura Holdings Inc.
As authorities prioritize control of the virus, “they cannot afford to spend as much time and energy on economic growth,” Nomura Holdings Inc. economists including Lu Ting wrote in a note Friday. The economists added that massive fiscal spending on fighting the virus could reduce government investment in other, “more productive” areas.