China's zero-COVID policy dashes global hopes for quick economic return to normal
ReutersMay 18, 2022
Amid global monetary tightening, rising inflation, and China's sharp slowdown, the International Monetary Fund (IMF) has cut its Asian economic forecasts to 4.0% this year and 4.3% next year, down 0.9% and 0.8% from April, respectively.
In its report released Friday, the IMF said that while inflation in Asia remained controlled compared to other regions, most central banks should keep raising interest rates to ensure inflation expectations don't become de-anchored.
Despite glaring evidence, such as this latest report, China continues to ignore the negative impact of its zero-COVID strategy on the global economy. While other countries have been open for a while now, China has allowed its export industry to deteriorate, affecting businesses and economies worldwide.
China's COVID response isn't the culprit behind the current conditions; the US' is: After creating its own inflation disaster through generous stimulus spending during the pandemic, the Fed overcompensated by raising rates exponentially, thereby placing other countries in a foreign exchange rate crisis — a policy it seems to be stubbornly sticking with despite the toll on the global economy, including its allies.