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New survey shows China at risk of exporting further inflationary turmoil


A new survey by MLIV Pulse has shown that China is at risk of exporting further inflationary turbulence due to its zero-Covid policy.

Escalating global supply chain issues and strenuous efforts, China’s Covid-zero strategy has forced central bankers to rein in inflation that is at multi-decade highs.

A majority of 540 survey participants predicted China will stand firm on tough lockdown policies that have disrupted supplies of everything from Adidas sneakers and Rolls-Royce cars to Nvidia computer chips.

Lagging behind their peers in developed countries this year, Chinese stocks have suffered due to long-standing Covid restrictions in Shanghai.

Warning of further economic difficulties ahead, Chinese Premier Li Keqiang told a State Council meeting that the challenges are now “greater than when the pandemic hit hard in 2020”.

According to a reading from the official Xinhua news agency, Li said, “We are currently at a critical moment to determine the economic trend for the whole year.”

China is the last major economy welded to a policy of mass testing and hard lockdowns to weed out virus clusters, but the tight restrictions have hurt businesses.

Li’s remarks are the latest in a growing chorus of calls from officials and business leaders for a better balance between stopping the virus and helping the struggling economy.

As regulators step up efforts to funnel fresh capital into the struggling property sector and help a virus-hit economy, China’s first public real estate investment trusts (REITs) based on residential properties will soon be launched.

REITs are a collective investment scheme that sells shares in a trust that owns a set of properties or infrastructure assets.

While issuing rules for the issuance of rental apartment REITs, the regulators said “It will also help prevent and reduce major risks and maintain the stable and healthy development of the real estate market.”

(With agency contributions)

sion5.com

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