Under China’s zero-Covid policy, there has been a wave of bankruptcies in many places. Zheng Yuhuang, a professor at Tsinghua University, revealed in a video that in the first half of this year, 460,000 companies in China went bankrupt. Over 3 million private businesses were shut down.
Zheng Yuhuang added that in April, the liquidation of enterprises across the country soared by more than 23% year on year.
Peng Dingding, a freelance writer living in Beijing, told NTD that he was not surprised by such data. He has friends who run a garment factory and a food company in Hebei; both are facing bankruptcy. His friend in Beijing, who opened a restaurant, owed 20 million yuan (nearly 3 million dollars) within two years.
It is worth noting that this data is more than the number of companies during the first outbreak in Wuhan. In February 2020, 66 cities across China announced they would implement a lockdown.
According to China’s official data released on July 15, the country’s economic growth rate in the second quarter only reached 0.4%, well below expectations.
The growth rate of 0.4% is the slowest in over two years, since the first quarter of 2020 when the coronavirus outbreak started in Wuhan.
Experts warn that the slowdown economy still persists for the year despite lockdown easing.
Due to strict lockdowns, businesses in China take a hard hit.
Especially in the property market, multiple real estate firms are facing a debt crisis, as many fail to pay due debts.
According to Caixin Global, about 200 major Chinese property developers had to pay 26 billion dollars of debts in June and July. Among them, 67% come from private developers, and oversea debts account for 56%.
Bloomberg reported from China Real Estate Information Corporation that homebuyers have refused to pay mortgages on at least 100 projects in more than 50 cities as of July 13. Analysts from Jefferies Financial Group Incorporated said there was an increase of 58 projects on July 12 and 28 on July 11.