China’s zero-Covid policies pushing economy to ‘near breaking point’: report

The Yuan is weakening by the day, growth forecasts have been slashed, and the government has shifted into recovery mode.

On Tuesday, Societe Generale analysts suggested that the Chinese economy has been pushed to "near breaking point" as a result of the lockdowns, which have brought entire cities to a halt.

This, in turn, has lead to supply chain issues, panic buying, and a general sense of uncertainty for those in China and around the world.

As CNN reports, investment banks have reduced their expectations for China's economic growth, with the International Monetary Fund putting it at 4.4 percent, down from 4.8 percent and far below the Chinese government's forecasted 5.5 percent.

The Yuan has dropped to its lowest level since 2020, and the Chinese stock market is not faring much better, with tech stocks being among the hardest hit.

Despite this, China has remained steadfast in its quest to achieve zero-COVID as more cities roll out massive testing and lockdown policies.

In an attempt to fix the economy, Chinese president Xi Jinping announced during a meeting of the Central Committee for Financial and Economic Affairs that he plans to go "all out" on domestic infrastructure spending.

According to CNBC, Lisheng Wang and a team at Goldman Sachs said that this "suggests to us that Chinese policymakers have been increasingly aware of the strong growth headwinds from Covid restrictions and continued property downturn, and thus becoming more determined to ramp up policy easing measures."

With COVID-19 continuing to wreak havoc on China's major cities, it remains unclear how the proposed projects would jive with the nation's strict public health policies.