In Shanghai, recently, an octogenarian told his neighbourhood committee member that he ran out of food and medicine and asked the member to help. The member, instead of helping, expressed his despair. “I am really helpless,” he conceded and said “I’m more sad than you are, because you are just one person. I see countless families.” The old man took pity on the committee member and ended up reassuring him.
Such stories are now common in Shanghai, which has witnessed draconian lockdowns for months. Although other countries throughout the world are focusing on treating cases and not letting them rise, China wants to eradicate COVID-19. Furthermore, China, under an insecure Xi Jinping, has been cracking down on private enterprises. This has put the Chinese economy under a lot of stress.
International investors who once saw China as a lucrative economy are now viewing it as a very “risky bet.” Due to the gloomy forecast of the Chinese economy, thanks largely to Xi Jin Ping’s COVID eradication strategy, overseas investors offloaded “more than $150bn in China-based yuan-denominated assets in the first quarter of this year, the largest decline on record. Chinese bonds alone saw a $61bn sell-off between February and May. Roughly $300bn could exit the country this year, more than double last year’s outflow of $129bn,” according to forecasts by the Washington-based Institute of International Finance.
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