This is how China's economy is affected by protests and restrictions

The Chinese have grown tired of the country's strict covid restrictions.

Large outbreaks of infection have led to widespread closures, which have been followed by large protests in several parts of the country.

On the stock market, the reaction has been negative.

According to Per Hammarlund, PhD in economics and chief strategist at the major bank SEB, believes that it is based on a fear of more extensive protests.

So far, they have not had any major impact on production.

- If there were to be more extensive protests and strikes, it would affect production and thus the economy, he says.

Stagnant ends up bigger threats

The strict covid restrictions are causing the Chinese to hold back on consumption.

At the same time, they affect the huge manufacturing industry, albeit on a small scale so far.

The shutdowns have, among other things, led to the world's largest iPhone factory running on austerity.

It gets worse if the restrictions affect those who work in the transport sector.

It can lead to problems for those who buy a lot of goods from China, for example Europe and the United States.

- Ports and transport systems still work, states Per Hammarlund.

This is how Sweden is affected

Many Swedish companies have invested heavily in China or have extensive operations there.

They will be negatively affected by an economic downturn in the country, emphasizes Per Hammarlund.

- When China's economy slows down, their business is also damaged.

But economic problems in China can also lead to positive effects for Swedish consumers.

If production in China declines, demand for fuel and raw materials will decrease, which could lead to lower prices at the gas pump and in the grocery store.

- A slowdown in China leads to lower demand for raw materials.

In the long run, it affects consumer prices, says Per Hammarlund.