Rising case numbers from numerous outbreaks across China have prompted a tightening of local curbs and lockdowns, including in parts of big cities such as the southern metropolis of Guangzhou, as the economic toll of the country’s zero-COVID policy mounts.

Data released on Monday showed that Chinese factory activity unexpectedly fell in October, dragged down by softening global demand and strict domestic COVID-19 curbs, which hit production, travel and shipping in the world’s second-largest economy.

“With the zero-COVID policy here to stay, we think the economy will continue to struggle heading into 2023,” Zichun Huang, economist at Capital Economics, said in a research note.

At this month’s twice-a-decade Communist Party Congress, President Xi Jinping reiterated China’s commitment to its zero-COVID policy, disappointing investors and countless Chinese frustrated by lockdowns, travel curbs and testing.

“We don’t expect the zero-COVID policy to be abandoned until 2024, which means virus disruptions will keep in-person services activity subdued,” said Huang from Capital Economics.

DISCONTENT

In the central city of Zhengzhou, a Foxconn plant that makes iPhones and employs about 200,000 people has been rocked by discontent over stringent measures to curb the spread of COVID-19.

A person with direct knowledge of the matter said iPhone production at the plant could drop as much as 30% in November, and that Taiwan-based Foxconn, formally Hon Hai Precision Industry Co Ltd, is working to boost production at a factory in Shenzhen to make up for the shortfall.

In Shanghai, the city’s Disney Resort abruptly suspended operations on Monday to comply with COVID-19 prevention measures, with all visitors at the time of the announcement required to stay in the park until they return a negative test for the virus.

Videos circulating on China’s Twitter-like Weibo, which could not be independently verified, showed people rushing to the park’s gates, which were already locked. Videos of people fleeing malls and office buildings for fear of being locked in have become commonplace on Chinese social media this year.

New cases in mainland China hit 2,898 on Sunday, topping 2,000 for a second straight day, a tiny number by global standards.

In Guangzhou, one of China’s biggest cities and an economic powerhouse, the number of new locally-transmitted cases totalled 1,110 from Oct. 24-30, up from 402 in the previous seven-day period, with the district of Haizhu, home to 1.8 million people, under lockdown.

A Guangzhou resident named Ye said he was in a suburban quarantine hotel after being told on Oct. 27 that he was deemed a close contact by virtue of walking on the same street three days earlier around the same time as someone who tested positive.

“I do not know how they calculated that. Also there is no room for you to query or dispute it. If they say that’s what you are, then that’s final,” said Ye, an artist in his 50s.

WIDESPREAD FLARE-UPS

Over the past week, authorities have raced to get a handle on rising cases in cities across China, including Datong, Xining, Nanjing, Xian, Zhengzhou and Wuhan, forcing temporary lockdown measures.

Du Fan, 40, founder of Wuhan Small Animals Protection Association, which won praise from animal lovers during the pandemic’s first lockdown in the central city in early 2020, said his residential compound had been locked down on Saturday.

“My biggest worry at the moment is that if this continues for too much longer, I’m afraid we won’t be able to continue rescuing the animals, because there’s no way to carry out a lot of work,” he said.

In the Chinese-controlled territory of Macau, authorities reinstated curbs including locking down a major casino over the weekend after a handful of cases were detected. Macau had been COVID-free for more than three months.

However, in Beijing the Universal Resort theme park reopened on Monday after being shut last week because one visitor had tested positive for coronavirus.

Mudanjiang in Heilongjiang province, bordering North Korea, extended a lockdown of some areas, according to local media.

Dandong, Suihua, Ruili - cities bordering North Korea, Russia and Myanmar respectively - are also experiencing outbreaks.

Fitch said that Adani Transmission Ltd and Adani Ports and Special Economic Zone are prone to risks, according to a note released late on Tuesday.

Fitch early last month said it had seen no immediate impact on its ratings of Adani Group entities and their securities following short-seller Hindenburg Research’s Jan. 24 report on the conglomerate.

Seven listed firms of the Adani Group have shed over $120 billion in market value since the report that alleged improper use of tax havens and stock manipulation by the ports-to-energy conglomerate - charges it has denied.

Fitch still said “cash flow generation from January 2023 to March 2024 will boost the liquidity of the rated groups.”

“It’s every part of the budget that you cannot touch,” he said while appearing on Spotlight with Munizae Jahangir aired on Aaj News on Tuesday.

He was asked about any part of the budget that a finance minister cannot touch. Ismail served in the same capacity twice. His last stint was brief, but crucial when the country was on the brink of default and led the ministry for talks with the International Monetary Fund.

“You think the defence is not giving information, the railways [department] also does not. Everyone is a sacred cow. We need a butcher to slaughter them.”

Pakistan recently approved its tax-heavy Fiscal Year 2024-25 budget as several business experts reiterated that the government failed to tax sacred cows despite Finance Minister Muhammad Aurangzeb’s ambitions.

The government further increased taxes on the salaried class. For those earning between Rs600,000 to Rs1,200,000 per annum, the tax rate has been increased from 2.5%% to 5%.

According to Ismail, provinces do not collect taxes on agriculture and property as people belonging to such sectors were part of the provincial “chambers”.

When asked, he said the armed forces budget has increased from Rs1,500 billion in 2017-18 to over Rs2,000 billion in the current fiscal year.

Ismail, along with Abbasi, is set to launch Awaam Pakistan party on July 5. The two leaders parted ways with the PML-N after the change of narrative and economic plans.

They and former PPP senator Mustafa Nawaz Khokhar had conducted seminars under ‘Reimagining Pakistan’ in the recent past. But Khokhar is not part of the party.

When asked, he said that the former senator was of the view that the party should be launched before elections. But Ismail said people were speaking about former prime minister Imran Khan in constituencies.

“Now, Mustafa thinks space is there but time is not right as many things are happening in politics, judiciary and a clash-like situation of institutions is seen,” the former PML-N leader said.

Goals of Awaam Pakistan

Firstly, he said that the party wants to give the opportunity to every Pakistani, irrespective of their gender, caste, and religion, to lead by giving them education, health, basic income and a job after graduation.

Secondly, Ismail added that the party wants to empower depressed youngsters and free them from the controlling mechanism in the country.

‘Every MPA in Punjab has been given Rs1b’

Ismail, who has slammed the annual outlay, said that the federal government has allocated Rs75 billion for MNAs projects and more than Rs500 billion has been allocated by provinces. “In Punjab, every MPA has been given Rs1 billion for their areas project.”

He was of the view that the prime minister’s decision to not take salary was a penny. “The PM must take a salary, but take right decisions and decrease the Rs500 billion allocated for the PSDP as it is serious money,” the former finance minister said.

Ismail went on to add that Rs30,000, which is the government’s expenditure was equal to 25 per cent of the national income.

Pensions breakdown

He revealed that more than Rs600 billion was allocated for defence institutions’ retired employees – out of the total Rs1,0109 billion budget.

Ismail stressed the need for reforms in pensions. “There should not be two pensions and it should not be more than the salary,” he said and warned that the government would not be able to pay pensions if the amount continues to increase after eight years.

He lamented that the government did not show any intention to do it despite making the statement.

7E and 236 C

While responding to State Finance Minister Ali Pervaiz’s comments on the withholding tax, he clarified that the 7E (tax on deemed income) law was introduced when Shehbaz Sharif was the prime minister during the PDM’s rule.

Ismail added that it was the 236C (advance tax on sale or transfer of immovable property) law, not the 7E. “It is nowhere written that these are those plots,” he said.

Finance minister’s domain

When asked whether the finance minister was being given room to implement his economic vision, he said: “Absolutely not because I think Aurangzeb cannot be blamed for the mistakes done in the budget.”

He reiterated that there was no need to spend so much on the PSPD. Ismail claimed that if the suggestions of Aurangzeb or the finance ministry were heard then the National Finance Commission award could have been revisited and provinces fund would have been decreased.

Ismail added that the provinces can still cut 10 per cent of their expenses.

Also, read this

Finance Minister Aurangzeb removed from ECNEC

Pakistan rejects IMF’s proposal to revisit NFC award: sources

IMF asks Pakistan to impose Rs1.3tr of taxes in budget: report

Deal with IMF

He claimed that the government did not comply with the IMF’s suggestions of revisiting the NFC award and taxing the property and agriculture sectors.

According to Ismail, the government has given nothing to the erstwhile Federally Administered Tribal Areas (Fata) and only given sales tax and customs duty relief to some companies

“The tax on salaried class was enough. When did IMF ask you to tax salaried class,” he said and accused the government of blaming the IMF for imposing further taxes.

“I think this budget will not last the whole year as there are anomalies in it. They will have to relook it,” he said.

Economic expert Khaqan Najeeb, who joined the show via video link, said that the approach to the budget was wrong as the government did not control its expenditure and brought any reforms.