China: new measures against Covid-19 can benefit the world economy

After a significant increase in cases of Covid-19, China started to adopt stricter measures of confinement of the population. After protests from the population, the government began to adopt a certain easing of restrictions. The decision could be beneficial to the global economy and ease the tension that has grown on China's borders.

Read more: China launches oral inhaled vaccine to fight Covid-19

Flexibilization of measures against Covid-19 relieves the relationship between supply and demand

The stiffness of restrictive measures brought a serious problem to China's economy: the lack of products. The blockade of several cities caused the delay in the manufacture of several items whose manufacture is Chinese. It affects the entire global economy.

One example was Apple. According to the Silicon Valley company, since November there has been a delay in the production of thousands of iPhone 14 and 14 Pro

. With no supply of the goods, the price rose. Therefore, there has been an increase in cell phones and other electronic items in recent weeks.

The problem escalates to larger proportions when we factor in the fact that the restrictions have also increased unemployment among Chinese youth. With no job and no income, they have nothing to spend in the country.

As a result, there is a drop in domestic demand. The reflection of this is the decrease in the need to import products – especially commodities – from other countries.

Benefits in the economy inside and outside borders

The knot begins to unravel in China's local economy. Now that establishments and people are circulating again, the Chinese population can breathe a little easier – but still wearing a mask.

The breeze of fresh air goes beyond borders and even arrives in Brazil. As China is one of our main exporters, if they buy Brazilian commodities again, more money will flow into our country.

According to the economist and CEO of Veedha Investimentos, Rodrigo Marcatti, the recovery of China's economy may stimulate activity in other countries as well. Above all, according to him, those that are trading partners, like Brazil.

“The easing should positively affect the Brazilian economy. We may see some kind of increase in demand,” he said in an interview with G1.

Good eyes

The easing of restriction measures against Covid-19 was well regarded by the financial market. Commodity prices like iron ore, oil and copper, for example, have already started to rise.

The positive reactions indicate that China's economy will grow exponentially again.

Graduated in Social Communication at the Federal University of Goiás. Passionate about digital media, pop culture, technology, politics and psychoanalysis.