Due to COVID-19 Spread, Chinese Companies' Sentiment Hits 9-Year Low... "Economic Recession Next Year"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Haeyoung] The corporate confidence index in China has fallen to its lowest level in nine years.

According to major foreign media on the 19th (local time), British consulting firm World Economics (WE) surveyed the confidence of Chinese companies and found that the index recorded 48.1 in December, down 3.7 points from the previous month (51.8). This is the lowest level since the survey began in 2013.

The survey was conducted among sales managers of more than 2,300 Chinese companies, with both sales and service indicators falling below 50. This shows that corporate sentiment in China has rapidly deteriorated following the surge in COVID-19 cases after China eased lockdown measures on the 7th.

WE stated, "The number of companies reporting negative impacts from COVID-19 has significantly increased," and "more than half of the respondents said they are experiencing difficulties in business operations." They further analyzed, "The survey results suggest that China's economic growth rate has sharply slowed and may head toward a recession in 2023."

In fact, as China abandoned its 'Zero COVID' policy and shifted to a 'With COVID' approach, the number of COVID-19 cases has surged, raising concerns that this could hinder China's economic recovery next year.

However, Wang, chief economist at Hangsheng Bank, diagnosed, "It will take at least one quarter for the situation to reverse," adding, "Liquidity is drying up, especially among small businesses in the service sector such as restaurants, gyms, and hotels."

This content was produced with the assistance of AI translation services.