Covid outbreaks have flared up in multiple cities across China since late September. The number of new daily cases (confirmed cases and asymptomatic infections) surged from a few hundred in September to more than 10,000 on Thursday. In particular, the city of Guangzhou, with a population of 19 million, reported that the number of daily new cases more than doubled in a week to 2,600. In the city, the number of mid-to-high risk areas rose from 1,400 at the end of September to around 7,000 on Thursday.
Therefore, tighter Covid-related restrictions have weighed on economic activity, especially services and the movement of people. In October and the first 10 days of November, the average number of people who rode the subway in 18 large Chinese cities fell 19% from the same period the previous year. That’s up from a 12% year-on-year drop in September. Property sales suffered deeper declines, falling by 18% year-on-year in October and 23% year-on-year in the first 10 days of November. The full truck load traffic index slid to about -26% year-on-year. Overall, the UBS Composite Activity Index weakened to -8.5% year-on-year in October and -12% year-on-year in early November.
