News Analysis 
As the Omicron variant is causing a surge in COVID-19 infections across 30 provinces and municipalities in China, Beijing’s “zero-COVID” restrictions appear to be causing more harm than good.
The strict measures are sapping the productivity of businesses, weakening the stock market’s performance, forcing about 400 million people to remain in lockdown, and causing the economy to contract.
Data from China’s multiple indices suggest that the Zero-COVID policy has weakened first-quarter business results and the economy overall.
For example, the Caixin manufacturing purchasing managers’ index (PMI) dropped to 48.1 in March. A reading of under 50 indicates a contraction of China’s manufacturing sector as compared to the previous month. Stock performance, measured by the Shanghai CSI 300 Index and Shenzhen Composite Index, dropped 15 percent and 18 percent, respectively. These were the sharpest quarterly drops since the stock market crash of 2015.
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