Another year of Covid zero tolerance in China has impacted the Chinese economy with a projected slowdown and a refocusing of economic objectives. These have all impacted, and will continue to impact, Chinese investment and business opportunities. The US sanctions imposed on the listing of Shenzhen-based SenseTime is just the latest facet of the ongoing attempts by the US and its allies to stunt China’s growth by closing off investment avenues. This type of external factor has also played a role in the slowdown in the economy.

China is facing inflationary pressures, with the Chinese Producer Price Index rising by 12.9% y-o-y in November. However, the sharpest price pressure comes from food, green vegetables in particular, rather than the type of inflationary pressures experienced by the US.

The Central Government Economic Work Conference concluded that the Chinese economy faced three new risks. These are reduced demand, disrupted supplies and weakened expectations. In particular, the Chinese economy faces shocks in chips, electricity, containers and labour supplies. These are all challenges to sustained economic growth and are also a concern for those considering exporting goods and services to China in 2022.

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