China’s economy is paying a price as lockdowns restrict nearly a third of its population.

In some places without any reported cases officials have put in place roadblocks, leading the State Council, China’s cabinet, to tell local authorities this week not to obstruct major roads, ports and airports.

The efforts to prevent an outbreak are creating such a big problem that economists have revised down their expectations for China’s economic output this year. One economist has gone so far as to predict that China could go into recession in the coming months.

Beijing has prioritized a zero-tolerance policy toward the coronavirus and outbreaks, said Ting Lu, chief China economist at Nomura.

“The problem is that when you set this kind of policy target, local governments will compete with each other,” he said. The consequence of this competition is that local governments will escalate their own pandemic control policies in order to ensure they don’t risk an outbreak that is difficult to get under control. For example, officials Guangzhou, a city of 15 million, began citywide testing after discovering 20 local cases last week.

“If all local governments are doing it this way then the whole economy would be in trouble,” Mr. Lu said, adding, “the whole system will amplify this zero Covid strategy.”

Article source: https://www.nytimes.com/2022/04/14/business/china-lockdowns-economy.html