News
Covid surge in China
Covid surge in China had hit its southern commercial hub Guangzhou, denting its economic prestige as it faces a difficult road to recovery, reported The Straits Times.
Three weeks after Xi Jinping, China’s top leader tried to reinvigorate China’s stalled economy by abruptly abandoning his stringent pandemic restrictions, downtown Guangzhou is faced with an unpredictable – and uncontrolled – epidemic and financial uncertainty, people and companies are spending cautiously, suggesting that the road to recovery will take time. Nearly three years of “zero-Covid” measures have crushed businesses. Streets are lined with shuttered stores and workshops. Walls are plastered not with “help wanted” signs, but with notices from entrepreneurs putting their businesses up for sale. Roads and alleys once packed with migrant workers are now mostly empty, reported The Straits Times.
China’s reversal of its Covid-19 restrictions in early December was meant to help places like Guangzhou. But the chaotic approach has contributed to a tsunami of infections that has swept across the nation, overwhelming hospitals and funeral parlours.In many industries, truck drivers and other workers have quickly fallen ill, temporarily stretching staff and slowing operations, reported The Straits Times.
The global economy is slowing, dragged down by high inflation, an energy crisis and geopolitical turmoil. As American and European shoppers tighten their budgets, China increasingly faces a double blow of slumping demand both at home and abroad.In Guangzhou, Tony Tang, the owner of a women’s clothing workshop, said his sales had plunged by two-thirds in the past year, reported The Straits Times.
Tang’s workforce has shrunk from 30 to 10, but there is no shortage of labour. When he needed a worker to help sew an order of halter tops, he went out on a street corner with a handmade cardboard sign and hired one within several minutes, for one-sixth less than he paid about a year ago.
China’s factory activity contracted further in December as rapidly spreading infections grounded workers, snarled deliveries and dampened demand, reported The Straits Times.
For service industries like restaurants, the same survey found, business was almost as bad as in early 2020, during the nearly nationwide lockdown that followed the first Covid-19 outbreak in the city of Wuhan. Eateries and other businesses closed last month as customers stayed home to avoid infection or because they were sick.
“The epidemic has had a great impact on the production and demand of enterprises, the attendance of personnel, and logistics and distribution,” the National Bureau of Statistics said in a statement that accompanied its release of the survey data.
Manufacturing had already been in decline in November when many cities and regions in China imposed lockdowns on residents in a futile bid to contain outbreaks. Car dealerships are crammed with unsold cars. Stores have little need to order more for their shelves when they are already full of unsold merchandise, reported The Straits Times.
Nio, an electric car manufacturer in east-central China’s Anhui province, said that Covid-19 outbreaks had affected its supply chain and reduced its car deliveries in December.
Tesla suspended the production of cars at its factory in Shanghai for the last week of December, a move that Yale Zhang, managing director of Automotive Foresight, a consultancy in Shanghai, saw as a sign of flagging sales in China and elsewhere, partly because other automakers are introducing more electric cars.
Many European manufacturers in China have been forced to operate with about half their usual staff for two to three weeks, affecting output somewhat, said Klaus Zenkel, the chair of the chamber’s South China chapter.The damage that “zero-Covid” inflicted on China’s once-unbeatable attractiveness as a manufacturing hub could be hard to repair, The Straits Times reported.
News
Sri Lanka, India caught in US-Iran ship crisis
By Shamindra Ferdinando
Iran has sought the Indian intervention, at the highest level, to provide lifesaving support to the crews of empty Iranian vessels stranded just outside Sri Lanka’s 12-nautical mile territorial waters off Galle.
Sources familiar with the issue said that Iran had brought the developing situation to the attention of New Delhi as the crews of almost 20 vessels, included Indian nationals. Sources stressed that the group of vessels that unloaded crude oil a couple of months back were now stranded within Sri Lanka’s Exclusive Economic Zone (EEZ).
The US Navy torpedoed an unarmed Iran frigate, returning from India, on 04 March, 2026, about 19 nautical miles off the Galle coast. The unprovoked attack killed nearly 100 Iranians.
The Iranian Embassy in Colombo has inquired from the Indian High Commission of their response to the situation, sources said. The US has issued a global warning against providing food, water, medicine and other services to the Iranian vessels. The outcome of Iran-India talks on the issue at hand was not known, though sources asserted India may not throw its weight behind Iranian efforts to address the issue.
Responding to The Island queries, sources said both Sri Lanka and India were in a dilemma due to the US warning. India couldn’t ignore the plight of the Indian crew members and the Iranian vessels in its backyard.
The Sri Lankan government remains tight-lipped about the vessels stranded in its EEZ. Our efforts to elicit a response from relevant authorities were in vain. In addition to Indians, there are Bangladeshis among the crew members. Iran has explicitly stated the responsibilities of the countries concerned to provide assistance in terms of international law.
The Iranian position was articulated by its Ambassador to Sri Lanka, Dr.Alireza Delkhosh, recently. In a special statement, Ambassador Delkhosh emphasised that in terms of the Convention on the Law of the Sea (Article 98) as well as SOLAS and SAR
Conventions, Sri Lanka couldn’t refrain from providing the needs of the Iranian vessels stranded in its EEZ.
SLMC leader Rauff Hakeem lambasted the NPP government in Parliament for failing to provide assistance to the Iranian ships. The former Minister alleged that the government was simply carrying out dictates of the US. He strongly criticised the way Foreign Minister Vijitha Herath was handling the issue.
News
Namal further remanded
MP Namal Rajapaksa, who is in remand custody over the controversial Airbus deal, was further remanded until October 27 by the Colombo Magistrate’s Court yesterday (13).
Colombo Chief Magistrate Asanga S. Bodaragama made the order after considering submissions by officers of the Commission to Investigate Allegations of Bribery or Corruption and lawyers representing Rajapaksa.
News
IMF projects Lankan economic growth to moderate amidst mounting global uncertainties
Sri Lanka’s economy is expected to sustain its recovery over the next two years, although growth is projected to moderate amid mounting global uncertainties, according to the International Monetary Fund’s (IMF) latest World Economic Outlook.
In its World Economic Outlook 2026: Resilience Under Strain, Urgent Choices, the IMF projects Sri Lanka’s economy to expand by 4% in 2026, slowing to 3.7% in 2027, following estimated growth of 5% in 2025.
Inflation, meanwhile, is forecast to rise to 5.3% in 2026 and 5.4% in 2027, reversing the average deflation rate of 0.5% recorded in 2025.
Unemployment is expected to remain steady at 3.9% throughout the forecast period.
The projections come amid growing pressure on the global economy from the ongoing conflict in the Middle East, elevated energy prices, geopolitical tensions and trade disruptions.
Sri Lanka’s external position is also expected to weaken, with the current account balance projected to shift from a surplus of 1.6% of gross domestic product (GDP) in 2025 to deficits of 0.5% in 2026 and 0.3% in 2027.
The IMF’s outlook points to continued economic expansion in Sri Lanka, but with slower growth, rising inflation and a narrowing external surplus giving way to current account deficits over the forecast period.
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