China’s economy is paying a price, as the blockade limits nearly a third of its population.

It is estimated that nearly 400 million people are in some form of blockage in China as employees try to stop the fast-growing Omicron epidemic, which is beginning to weigh on the world’s second-largest economy.

Hundreds of thousands of people have been sent to isolation facilities in China, and millions more have been told to stay in their homes. Officials in dozens of cities have shut down normal daily life across the country in a race to track down and track the virus and end China’s worst outbreak since the pandemic began.

Japan’s Nomura Bank estimates that 373 million people in 45 cities are currently under some sort of blockage, about a third of the population, the equivalent of about $ 7.2 trillion in annual gross domestic product.

It is part of a pandemic strategy that is increasingly at odds with China’s economic growth expectations – one that has alarmed economists and even the country’s prime minister.

Experts are beginning to warn that China’s target of 5.5% economic growth in 2022 is now unrealistic, as much of everyday economic life has come to a halt. Li Keqiang, the country’s prime minister, warned local authorities of the rising economic cost of each new coronavirus epidemic on Monday, urging authorities to balance pandemic control measures with the need to boost growth.

“It is necessary to coordinate the prevention and control of the epidemic and economic and social development,” Mr Lee said, according to state media.

China has reported more than 350,000 cases of locally transmitted viruses since its last outbreak in March. While this may not seem like a large number to any country battling the outbreak of the highly contagious version of Omicron, China is still pursuing a strategy aimed at completely eradicating the virus, driven in part by fears of more the elderly, unvaccinated population. There are still about 40 million people over the age of 60 who have not had an injection of Covid.

China’s response to the latest outbreak is also beginning to affect the global supply chain, as factories producing iPhones, electric cars and semiconductors have had to suspend operations. Some critical components cannot be transported by truck from ports to factories due to road obstacles and strict Covid testing requirements.

Pegatron, a major maker of Apple’s iPhone, said this week that two of its factories in China have stopped production “in response to local authorities’ prevention of Covid-19.” German auto parts maker Bosch and carmaker Tesla are among other global companies that have had to shut down because truck drivers have to show negative test results within 48 hours to enter cities like Shanghai.

In some places without reports, officials have blocked roads, prompting the State Council, the Chinese cabinet, to tell local authorities this week not to obstruct major roads, ports and airports.

Efforts to prevent the epidemic are creating such a big problem that economists have reconsidered their expectations of China’s economic performance this year. An economist has gone so far as to predict that China may fall into recession in the coming months.

Beijing has given priority to a policy of zero tolerance for coronavirus and outbreaks, said Ting Lu, China’s chief economist at Nomura.

“The problem is that when you set that kind of policy goal, local authorities will compete with each other,” he said. The consequence of this competition is that local authorities will escalate their own pandemic control policies to ensure that they do not run the risk of an outbreak that is difficult to control. For example, officials in Guangzhou, a city of 15 million people, began testing across the city after discovering 20 local cases last week.

“If all local authorities do it this way, then the whole economy will be in trouble,” Mr Lou said, adding, “the whole system will strengthen this zero Covid strategy.”

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