China fights economic slump, sticks to costly 'zero COVID'

Growth for the full year is forecast as low as 3.8%, below the ruling party’s official 5.5% target and less than half of 2021′s 8.1% expansion.“The Chinese government is willing to make some sacrifices on the economy in the short term to trade for long-term growth,” said Nomura economist Ting Lu. However, he said, “achieving ‘zero COVID’ is quite challenging, because omicron is more infectious.”A foreign ministry spokesman on Wednesday defended China’s approach as realistic.China’s strategy is “not to pursue zero infection but to control the epidemic situation in the shortest time at the lowest social cost,” said Zhao Lijian. That triggered a plunge in construction and housing sales in mid-2021.In a sign of the intensity of economic pain, Beijing faces appeals from foreign companies that usually avoid questioning official policy for fear of retaliation.The American Chamber of Commerce in China says its members want a “more optimal balance” between disease prevention and business.More than half of 121 companies that responded to an April 29-May 5 survey have delayed or reduced investment, according to the chamber.“Members don’t see any light at the end of the tunnel,” said the chamber chairman, Colm Rafferty, in a statement.At a May 5 meeting, party leaders appeared to reject such appeals and the “living with the virus” stance adopted by other governments.Relaxing virus-control measures will lead to “large-scale infections, serious illness and deaths” and “seriously affect” the economy, they said in a statement.