In particular, Covid-19 and the fight against it are the main reasons why business confidence in China has fallen to its lowest level since January 2013. This is according to a recent survey by World Economics.
China will take the opposite approach than before
China first adopted a zero-covid strategy to combat the spread of the coronavirus. However, this resulted in a paralysis of economic activity in many of the country’s main economic centres, raising fears of a sharp drop in Chinese demand and a subsequent negative impact on the global economy. Now China has decided to go the exact opposite way, which in turn raises fears of economic paralysis due to the uncontrolled spread of the disease.
Business confidence in China is falling
China’s business confidence index fell to 48.1 in December from 51.8 in November. This is according to a survey conducted by World Economics on a sample of 2,300 Chinese companies between 1 and 16 December. The index value is the lowest since January 2013, when business confidence was first measured by this index in China. According to World Economics, the index suggests that “economic growth in China is slowing sharply and may even enter a recession in 2023″.
