Lockdown may hit China growth say experts

Goldman Sachs economists said in their latest report that China's nominal economic growth could plummet to 1.5 percent this year if the country reintroduces a nationwide lockdown due to the rampant Omicron variant.

What is currently circulating in the mainland is the Delta variant, not Omicron, but a nationwide lockdown could be imposed again if the Omicron, which multiplies faster than any previous forms of Covid, spreads widely in China, the report said.

This came as Chinese developer Shimao (0813) defaulted on a loan after missing a 645 million yuan (HK$789 million) payment, the lender said in a letter yesterday, in the latest sign of distress in China's property sector.

China Credit Trust said in the letter that 755 million yuan of the trust loan had been repaid. However, the absence of the remaining payment meant the loan was now in default, it added in the letter to investors in the loan.

Meanwhile, activity in China's services sector expanded at a faster pace in December amid higher demand and easing inflationary pressure but continuing small-scale Covid outbreaks weighed on the outlook, a private sector survey showed.

The Caixin/Markit services Purchasing Managers' Index rose to 53.1 in December from 52.1 in November, remaining above the 50-point mark that separates growth from contraction on a monthly basis.