What: China is abolishing its zero Covid strategy likely due to a shrinking economy, but Covid increases may delay recovery plans.

hy it is important: China’s production and retail sales missed November forecasts, resulting in the country’s worst output data in six months, with growth at 2.2%, down compared to October’s 5%, and below expectations of 3.6%.

Al Jazeera reported China’s retail sales fell 5.9%, with the service industry especially hit. The slump in retail sales was higher than expected, with online sales of physical goods rising by 4% year-on-year, down sharply from October.

As the world continues to see inflation and higher cost of goods caused by the Russian invasion of Ukraine, demand for China’s exports also fell by 8.7% compared to 2021.

Covid surge dampens China’s retail reopening