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Zero Covid-19 deaths, says China, but panic spreads across globe

Dozens of hearses queued outside a Beijing crematorium on Wednesday, even as reported no new Covid-19 deaths in its growing outbreak, sparking criticism of its virus accounting as the capital braces for a surge of cases.

Following widespread protests, the country this month began dismantling its unpopular ‘zero-Covid’ regime that had largely kept the virus under control for three years though at great economic and psychological cost.

The abrupt change of policy has caught a fragile health system unprepared and hospitals are scrambling for beds and blood, pharmacies for drugs, and authorities are racing to build special clinics. Experts predict could face more than a million deaths next year.

As of Wednesday, the country has reported only 5,241 Covid-19 fatalities since the pandemic began.

Some estimates, however, predict the wave currently sweeping the country could infect up to 60 per cent of China’s 1.4 billion-strong population.

At a crematorium in Beijing’s Tongzhou district, a Reuters witness saw a queue of about 40 hearses waiting to enter while the parking lot was full.

Inside, family and friends had gathered in mourning around 20 coffins awaiting cremation. Staff wore hazmat suits and smoke rose from five of the 15 furnaces.

There was a heavy police presence outside the crematorium.

Reuters could not verify whether the deaths were caused by Covid.

Some Beijing residents have to wait for days to cremate relatives or pay steep fees to secure faster service, funeral home workers said.

A worker at one Beijing funeral parlour posted on social media an offer of “speedy arrangement of hearses, no queue for cremation” for a fee of 26,000 yuan ($3,730).

Reuters could not verify the post.

Corporate down in slump

As China’s massive wave of Covid-19 infections begins its march across a country roughly the size of Europe, the ripple effect on business is accelerating.

From its original epicentre in the north, including the capital Beijing, the infections are spreading throughout the country and cases are impeding workforces in manufacturing belts, including the Yangtze River Delta, near Shanghai.

Retail and financial services businesses have been hard hit by a shortage of staff, with manufacturers not far behind.

China’s factory output and retail sales clocked their worst readings in six months in November.

Retail sales fell 5.9 per cent on year amid broad-based weakness in the services sector, while automobile production slumped 9.9 per cent, swinging from an 8.6 per cent gain in October.

Leading automobile chipmaker, Renesas Electronics suspended production at its Beijing plant last Friday due to infections, but said it would re-open Tuesday.

“In a couple of cases companies have shut down either totally their plants or have reduced some of the production,” President of the European Union Chamber of Commerce in China Joerg Wuttke said.

China’s “closed loop” system, where employees are isolated from the wider world, and which had been relied on by many factories in China throughout the zero-COVID era, was beginning to fall apart as infections creep into workforces, Wuttke added.

“You have to prepare your people to shut it down before they have this fever, which basically clouds their judgment if they are at the machinery, for example.”

A senior executive at a large automotive manufacturer said keeping workers with specialist skills on the factory floor amid a surge in cases was just one of the issues they face.

“If the truck drivers have problems, then goods cannot be delivered to factories, the factories cannot move cars to the shops, and the whole industry chain is affected,” he said.

A senior manager, working in the heavy duty truck sector, said dealers he spoke to were either already infected, or caring for sick family members.

“Basically, everything has stalled and you cannot make any actual business,” he said. Both executives declined to be identified as they are not authorised to speak to media.

China’s position as a key cog in the global supply chain, as well as a major driver of sales for many global consumer goods companies, means further hits to production output and consumer demand will be felt far beyond its borders.

Shanghai’s extended lockdown in April and May caused disruption to the supply chains of multinationals including Apple, Tesla, Adidas and Est Lauder.

For now, however, that impact is being limited in part by economic hardships elsewhere in the world denting demand for products from China.

“Reduced demand in the U.S. and Europe for consumer goods probably hides some of the impact,” said Jonathan Chitayat, the Asia boss of Shanghai-based Genimex Group, a contract manufacturer for a range of consumer products.

Working in manufacturers’ favour as an increasing percentage of the workforce are hit by infections in coming months is the Lunar New Year holiday, where many factories shut for at least a month as workers travel back to their home towns.

Even though the worst effects of the wave are still to emerge, some businesses in China remain relatively upbeat about the future, once the initial wave of infections subsides.

“Most of my clients are up to their eyeballs in debt right now, so all of them are gonna be out trying to entertain people and trying to push deals through,” said Dillon King, co-founder of an import-based food and beverage company.

“I’m optimistic for this year coming up, but definitely feeling the pain of the last few weeks for sure.”

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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