China's radical departure from its strict three-year zero-Covid policy has sparked a "bushfire" of virus infections that will have a "negative" impact on the Chinese economy and subsequently the entire world over the next three to six months , the International Monetary Fund (IMF) has warned in unusually clear terms.

Henrik Ankenbrand

Economic correspondent for China based in Shanghai.

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For the first time in 40 years, China's economic growth in 2022 will not be higher than or even lower than the growth of the global economy as a whole, said IMF boss Kristalina Georgieva in an interview with the American television station "CBS".

At the end of November, the fund had forecast growth of 3.2 percent for China in 2022.

Three weeks later, the Chinese leadership had surprisingly abandoned almost all restrictions of the zero-Covid policy with the stroke of a pen, although according to official figures only 58 percent of the population had received a booster vaccination as a prerequisite for effectiveness of the vaccine applies.

State propaganda justified the reversal with “new findings by Chinese scientists” that the omicron variant triggers milder courses of the disease than previous variants of the coronavirus.

Radical policy change

The American analysis company China Beige Book estimates that China's economy shrank in the fourth quarter of last year and even grew by only 2 percent for the year as a whole.

Because the country is not keeping up with vaccinating its population and the government is not treating the infected with drugs that stop the virus from multiplying in the cells, "it will be tough for China in the coming few months," said IMF boss Georgieva on Sunday.

Because growth is also falling in the USA and Europe, the IMF expects that in 2023 a third of the global economy and half of the European economy will slide into recession.

The coming year will be "tougher" for the world than the past 12 months, predicted the director of the IMF.

Shortly before the radical change in policy, a dramatic slump in exports had obviously startled the government.

Since then, the wave of negative economic indicators has not stopped.

Only on , the National Bureau of Statistics announced that the Chinese manufacturing purchasing managers' index, which measures the economic activity of companies, fell by one point from the previous month to 47 in December.

A value of over 50 means that the majority of the companies surveyed want to produce more, i.e. expand their activities.

A score below 50 indicates that the majority of managers surveyed for procurement of manufacturing materials expect their company to produce less.

Other indices that reflect the mood in the construction industry and the service sector

Xi's New Year's speech

There had previously been confusion about the state of China's economy.

President Xi Jinping emphasized in his New Year's speech that the economy had developed "stably".

Its output is also expected to have exceeded 120 trillion yuan ($17.7 trillion) last year.

News services such as Bloomberg then reported that China's leadership apparently assumes that year-on-year growth in gross domestic product of 4.4 percent in 2022 will be far greater than all economists had predicted.

However, observers such as the Beijing finance professor Michael Pettis pointed out that the figure given by Xi is a nominal value, i.e. not adjusted for inflation, while organizations such as the IMF calculate with real economic growth, which takes price changes into account and in the result is smaller.

Observers see the fact that Xi's New Year's speech was milder in tone compared to previous years as further evidence that the president is under pressure after the radical about-face in dealing with the virus in the country and the Communist Party.

It is unclear how many cases of infection there are in the nation of billions because the government no longer officially continues the statistics.

The British analysis house Airfinity estimates that 1.8 million people are currently infected with Covid every day and that the virus claims 9,000 lives in the country every day.

By the end of April, the number of people killed by the virus will rise to 1.7 million, the London analysts have calculated based on previous data from Chinese provinces and empirical values ​​​​from other countries.

While in cities like Shanghai and Beijing people are increasingly pouring into shopping malls and offices these days, the state can no longer keep up with the cremation of the dead.

Relatives told the FAZ that they had had to keep the corpses of their mothers or fathers who died after contracting Covid in their home for weeks because they would not be accepted by the city crematoria.