In its previous forecasts in June, the institution was already worried about the growth of the second world economy, then under the yoke of “zero Covid”, a strict health policy and very penalizing for activity.
The country abruptly turned around in early December and lifted most of the restrictions in force for nearly three years, after the first cases of Covid appeared in Wuhan (center) at the end of 2019.
Experts now fear that China is ill-prepared for the wave of infections linked to this reopening, while millions of elderly and vulnerable people are not vaccinated.
An elderly person is tested for Covid-19, in Beijing, November 22, 2022 © Jade GAO / AFP
In this context, the world's second largest economy should see its GDP progress this year by only 2.7% and then by 4.3% next year, according to the World Bank.
This is a sharp decline from the institution's previous forecasts, which in June forecast a 4.3% increase in China's gross domestic product (GDP) in 2022, then 8.1%. in 2023.
Last year, growth had reached 8.1% due to a catch-up with 2020, when activity had been stopped at the very start of the epidemic with the confinement of Wuhan.
"China's growth prospects are subject to significant risks," said the World Bank, citing "the uncertain trajectory of the pandemic".
A woman gets tested for the presence of Covid-19 in Shanghai's Huangpu district on December 19, 2022 © Hector RETAMAL / AFP/Archives
Vaccination in question
The capital Beijing and its 22 million inhabitants are particularly affected by a wave of contamination unprecedented since the beginning of the pandemic, and which has spread at lightning speed in recent days.
Testimonies report an upsurge in activity in crematoriums, as well as overwhelmed hospitals, while anti-flu drugs are lacking in pharmacies.
“Efforts to increase vaccination, especially among high-risk groups, may allow for a safer and less disruptive (China) reopening,” the bank said.
For fear of catching the Covid, many Chinese stay at home, which heavily penalizes consumption while many shops are closed.
Growth will depend on the "behaviour of households and businesses" in the weeks and months to come, warns the World Bank.
People in protective suits wait to test passengers for the Covid-19 coronavirus after arriving at Hongqiao station in Shanghai on December 6, 2022 © HECTOR RETAMAL / AFP/Archives
At the same time, the country is going through an unprecedented crisis in real estate, historically an engine of growth in China.
This sector, which with construction represents more than a quarter of the country's GDP, has been suffering since measures adopted by Beijing in 2020 to reduce corporate debt.
After years of dizzying increases, property sales are now down in many cities.
And many promoters are fighting for their survival, which is weakening the entire construction sector and its thousands of companies.
"Ongoing tensions in the real estate sector could have broader macroeconomic and financial repercussions," warns the World Bank.
The war in Ukraine, inflation and slowing demand for manufactured goods amid fears of a global recession are also weighing.
China had set a growth target of around 5.5% for 2022 at the start of the year, which now seems unrealistic for many economists.
This figure, even if it were reached, would still be the worst performance for the country in four decades, with the exception of 2020 disrupted by the beginnings of the pandemic.
© 2022 AFP