IMF chief warns China on repercussions of lockdowns, asks it to asses zero-COVID policy

The International Monetary Fund (IMF) on Friday raised a warning against China's zero-COVID approach, saying that the hardline policy risks damaging the global economy. Calling for an immediate reassessment of its stringent lockdowns to curb the spread of the highly-transmissible new COVID-19 strain, Omicron, IMF chief Kristalina Georgieva slammed Beijing's "hardline" strategy, saying it only contained the pandemic in China for "some time." Speaking at the World Economic Forum (WEF) on a virtual panel, Georgieva stated that what was supposed to be beneficial is now proving to be a budget on China's economy and globally.

"China is still using a zero-COVID policy. But what COVID is teaching all of us is that a highly transmissible variant may be much more difficult to contain without a dramatic impact on the economy,” said Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), as quoted by The Guardian.

Georgieva's assertions come after China in the past few weeks imposed a series of stern lockdowns in Xi'an, Yan'an, and Tianjin, after daily COVID-19 cases crossed 200. Recently, Hanan province was ordered into lockdown, pushing millions of people to stay at home after China's national health commission recorded 87 new community-transmitted coronavirus cases. Other adjoining cities have also been pushed under similar shutdowns.

China's economy slowed down due to COVID-related lockdowns: IMF

The IMF chief also noted that arbitrary lockdowns have interrupted consumer spending, leading to a considerable slowdown in China's economy. She also lambasted Beijing for withdrawing financial support to workers and businesses, saying that the market needed such subsidies from the government and lowered interest rates from China's central bank, People's Bank of China. It should be mentioned that earlier this week People's Bank of China slashed the main mortgage rate, with analysts in the mainland believing there could be more such rate cuts.

IMF boss' warning comes days after CNN in a report criticised China's zero-COVID approach, saying that it has majorly impacted business, domestically and internationally. Citing Goldman Sachs, a US-based investment banking company, the CNN report highlighted that there could be at least a 0.5% from 4.8% economic growth in the GDP of the second-largest economy of the world. Another multinational investment bank, Morgan Stanley also seconded the stance, stressing that the negatives of the zero-COVID policy outweigh the benefits.

(Image: AP)