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China’s factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years as COVID infections swept through production lines after Beijing’s abrupt easing of anti-virus measures.

Weakening external demand on the back of growing global recession fears amid rising interest rates, inflation and the war in Ukraine may further slow China's exports, hurting its massive manufacturing sector and hampering the economic recovery.Weakening external demand on the back of growing global recession fears amid rising interest rates, inflation and the war in Ukraine may further slow China's exports, hurting its massive manufacturing sector and hampering the economic recovery.

The dismantling of the anti-virus rules has been welcomed by businesses although it has disrupted operations. Some companies are trying to minimise disruption s by splitting their remaining healthy staff into two teams, with only one team working a particular shift, or maintaining a closed-loop system in their factories and surrounding compounds.

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