Page 22 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
and developing economies were anticipated to to a dozen others. Guangzhou Health Commission
substantially reduce new cases. However, the ordered residents in five streets of the Liwan
outlook is subject to considerable uncertainty. A District to mostly stay at home. Households could
more persistent pandemic, a wave of corporate send one member out each day to buy necessities,
bankruptcies, financial stress, or even social and students studied remotely, with some
unrest could derail the recovery. At the same exceptions where boarding at school was possible.
time, more rapid success in stamping out The coronavirus spread in Central China in 2019,
COVID-19 and greater spillovers from advanced igniting the pandemic, but the country has since
economy growth could generate more vigorous avoided major new virus waves by applying strict
global growth. Even so, the pandemic is expected controls. Officials in Guangzhou said the June 2021
to have caused serious setbacks to development outbreak was a worrisome development since the
gains. Although per capita income growth was city is a major business and manufacturing center
projected to be 4.9% among emerging market close to Hong Kong (Buckley).
and developing economies in 2021, it is forecast
to be essentially flat in low-income countries. Foreign businesses worried that tough
Per capita income lost in 2020 will not be fully quarantines and restrictions could persist into
recouped by 2022 in about two-thirds of emerging 2022 as Beijing struggled with variants and
market and developing economies, including questions about its vaccines. Neighborhoods
three-quarters of fragile and conflict-affected low- under strict lockdown. Thousands quarantined.
income countries. By the end of 2021, about 100 Millions tested in mere days. Overseas arrivals
million people are expected to have fallen back locked up for weeks and sometimes months.
into extreme poverty. These adverse impacts China has followed variations of that formula for
have been felt hardest by the most vulnerable dealing with the coronavirus for more than a year
groups – women, children, and unskilled and — and the Guangzhou outbreak suggested that
informal workers. Global inflation, which has they could be part of Chinese life for some time
increased along with the economic recovery, is to come. China appeared to have the coronavirus
anticipated to continue to rise over the rest of under control, but hundreds of millions of
the year; however, it is expected to remain within Chinese people remained unvaccinated. New
the target range for most countries. In those variants of the virus appeared, and questions
emerging market and developing economies in remained about whether China’s self-made
which inflation rises above target, this trend may vaccines could stop them. The city tested
not warrant a monetary policy response provided practically its entire population of 18.7 million in
it is temporary and inflation expectations remain less than a week, some of them for the second
well-anchored (World Bank Group). time. China’s approach has evolved since the
coronavirus first emerged, when Beijing initially
Impacts on China and US put harsh restrictions on hundreds of millions
of people. Today its lockdowns are focused on
Officials in Guangzhou ordered a neighborhood neighborhoods rather than cities or provinces.
to lock down in June, closing schools and banning China has made vaccination the centerpiece of its
dining in restaurants while they tried to contain a strategy. Still, many of the core tenets remain for a
cluster of coronavirus cases that appeared to have huge and densely populated country: vast testing,
spread from a dim sum restaurant. Investigators strict limits on movement and intense scrutiny of
traced the burst of cases in the city, the capital of arrivals from other countries (Bradsher).
Guangdong Province, to a 75-year-old woman who
began experiencing a fever and other symptoms Experts cite longer-term concerns about China’s
and was confirmed to be infected by the virus. She economic prospects, including the high debt
had dined at a dim sum restaurant in the Liwan levels of its state-owned companies. Reliance on
District, where she lives, and medical tracking investment-led growth, fueled by credit expansion,
uncovered two other people at the restaurant who builds up even further leverage and risks in an
were infected and appear to have spread the virus already weak financial system, and will further
pull down efficiency and the sustainable growth
22
and developing economies were anticipated to to a dozen others. Guangzhou Health Commission
substantially reduce new cases. However, the ordered residents in five streets of the Liwan
outlook is subject to considerable uncertainty. A District to mostly stay at home. Households could
more persistent pandemic, a wave of corporate send one member out each day to buy necessities,
bankruptcies, financial stress, or even social and students studied remotely, with some
unrest could derail the recovery. At the same exceptions where boarding at school was possible.
time, more rapid success in stamping out The coronavirus spread in Central China in 2019,
COVID-19 and greater spillovers from advanced igniting the pandemic, but the country has since
economy growth could generate more vigorous avoided major new virus waves by applying strict
global growth. Even so, the pandemic is expected controls. Officials in Guangzhou said the June 2021
to have caused serious setbacks to development outbreak was a worrisome development since the
gains. Although per capita income growth was city is a major business and manufacturing center
projected to be 4.9% among emerging market close to Hong Kong (Buckley).
and developing economies in 2021, it is forecast
to be essentially flat in low-income countries. Foreign businesses worried that tough
Per capita income lost in 2020 will not be fully quarantines and restrictions could persist into
recouped by 2022 in about two-thirds of emerging 2022 as Beijing struggled with variants and
market and developing economies, including questions about its vaccines. Neighborhoods
three-quarters of fragile and conflict-affected low- under strict lockdown. Thousands quarantined.
income countries. By the end of 2021, about 100 Millions tested in mere days. Overseas arrivals
million people are expected to have fallen back locked up for weeks and sometimes months.
into extreme poverty. These adverse impacts China has followed variations of that formula for
have been felt hardest by the most vulnerable dealing with the coronavirus for more than a year
groups – women, children, and unskilled and — and the Guangzhou outbreak suggested that
informal workers. Global inflation, which has they could be part of Chinese life for some time
increased along with the economic recovery, is to come. China appeared to have the coronavirus
anticipated to continue to rise over the rest of under control, but hundreds of millions of
the year; however, it is expected to remain within Chinese people remained unvaccinated. New
the target range for most countries. In those variants of the virus appeared, and questions
emerging market and developing economies in remained about whether China’s self-made
which inflation rises above target, this trend may vaccines could stop them. The city tested
not warrant a monetary policy response provided practically its entire population of 18.7 million in
it is temporary and inflation expectations remain less than a week, some of them for the second
well-anchored (World Bank Group). time. China’s approach has evolved since the
coronavirus first emerged, when Beijing initially
Impacts on China and US put harsh restrictions on hundreds of millions
of people. Today its lockdowns are focused on
Officials in Guangzhou ordered a neighborhood neighborhoods rather than cities or provinces.
to lock down in June, closing schools and banning China has made vaccination the centerpiece of its
dining in restaurants while they tried to contain a strategy. Still, many of the core tenets remain for a
cluster of coronavirus cases that appeared to have huge and densely populated country: vast testing,
spread from a dim sum restaurant. Investigators strict limits on movement and intense scrutiny of
traced the burst of cases in the city, the capital of arrivals from other countries (Bradsher).
Guangdong Province, to a 75-year-old woman who
began experiencing a fever and other symptoms Experts cite longer-term concerns about China’s
and was confirmed to be infected by the virus. She economic prospects, including the high debt
had dined at a dim sum restaurant in the Liwan levels of its state-owned companies. Reliance on
District, where she lives, and medical tracking investment-led growth, fueled by credit expansion,
uncovered two other people at the restaurant who builds up even further leverage and risks in an
were infected and appear to have spread the virus already weak financial system, and will further
pull down efficiency and the sustainable growth
22
