China needs more than fiscal and monetary support to get its economy buzzing again

DESPITE China’s central government and central bank promising a slew of fiscal and monetary support measures to keep the economy humming in recent weeks, the growth outlook still looks dim.

A chorus of observers are saying that there seems to be just one policy that Beijing doesn’t seem to want to touch, and yet could make all the difference to its economic growth - and that is zero-Covid, or the pursuit to keep infections near zero.

Last Friday (Sep 16), China released a host of macroeconomic data for the month of August. Observers were surprised to see that retail sales, industrial production, and fixed-asset investment data improved at a better than expected rate. However, some noted that retail sales and industrial output rose only because they were much lower a year ago.