China sees record COVID infections as economic outlook darkens

China reported a record high number of COVID-19 infections on Thursday_ with lockdowns across the country and other curbs that are darkening the outlook for the world's second largest economy.

The surge in the number of infections_ at record highs not seen since an outbreak in Shanghai earlier this year_ is diminishing investors' hopes that China will soon ease the rigid zero-COVID policy that_ along with a downturn in the property market_ is battering the economy.

The restrictions have also extracted a toll on China's increasingly frustrated residents_ as well as output at factories including the world's biggest iPhone plant_ which has been rocked by violent clashes between workers and security personnel in a rare show of dissent.

"We believe reopening is still likely to be a prolonged process with high costs_" Nomura analysts wrote in a note. The brokerage cut its GDP forecast for the fourth quarter to 2.4 per cent year-over-year from 2.8 per cent and also cut its forecast for full-year growth to 2.8 per cent from 2.9 per cent.

China's leadership has stuck by its zero-COVID policy_ which includes some of the strictest restrictions in the world_ saying it is necessary to save lives and prevent the medical system from being overwhelmed.

However_ in an acknowledgement of the pressure on the economy_ the cabinet said China would use timely cuts in bank cash reserves and use other monetary policy tools to make sure there is enough liquidity_ state media reported on Wednesday_ a hint that a cut in the reserve requirement ratio (RRR) may be coming soon.

China stocks fell on Thursday as concerns over the record-high caseload overshadowed optimism from fresh economic stimulus.

While official infection tallies are low by global standards_ China tries to stamp out every infection chain_ making it a global outlier under a signature policy of President Xi Jinping.

China recently began loosening some measures related to mass-testing and quarantine_ and is trying to avoid catch-all measures such as lockdowns like the one imposed on Shanghai's 25 million residents.

Recently_ cities have been using more localised and often unannounced lockdowns. In Beijing_ for example_ numerous residents said they had received notices from their housing compounds in recent days informing them of three-day lockdowns.

Nomura analysts estimate that more than one-fifth of China's total GDP is under lockdown_ a figure that exceeds the size of the British economy.

"Shanghai-style full lockdowns could be avoided_ but they might be replaced by more frequent partial lockdowns in a rising number of cities due to surging COVID case numbers_" Nomura analysts wrote. The bank has also lowered its GDP growth forecast for next year to 4.0 per cent from 4.3 per cent.

The city of Zhengzhou_ where workers at the massive Foxconn factory that makes iPhones for Apple Inc staged protests_ announced five days of mass testing in eight of its districts_ the latest city to revive daily tests for millions of residents.