Gordon Chang, a senior fellow at the Gatestone Institute, responded to the blockade in Shanghai by creating a supply chain nightmare.
From electric vehicles to fast food, Chinese industries are feeling the effects of blocking COVID-19 as demand falls.
Prior to the blockade, sales of electric vehicles in China, the world’s second-largest economy, were booming. Tesla’s sales in China more than halved in the first quarter, while rivals BYD’s sales quadrupled, according to Reuters.
In this photo, published by Xinhua News Agency, a luggage carrier returns home after being quarantined due to local COVID cases found in Lianqin Village in Beicai City, Pudong New Area, Shanghai, Tuesday, 26 April 2022 (Jin Liwang / Xinhua via AP / AP Newsroom)
China is sticking to a strict “zero COVID” policy, although many other countries are easing restrictions and seeing if they can live with the virus. Much of Shanghai, the center of finance, manufacturing and shipping, remains locked up, disrupting people’s lives and hitting the economy.
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Millions remain confined to their buildings or complexes in Shanghai under blockade, which is only slightly eased. Showrooms, shops and malls in Shanghai, China’s largest city, have closed and the city’s 25 million people shop for essentials only.
A retailer of a first-class German car brand in Jiangsu province told Reuters that the current blockages “could be worse than the first wave of COVID in 2020, when the economic recovery was rapid and strong.”
“There is more uncertainty in the economy these days, and stock and real estate markets are not doing well,” he said.
Protective suit workers ride an electric tricycle on the street during a blockade, amid the coronavirus disease pandemic (COVID-19), in Shanghai, China, May 1, 2022 (REUTERS / Aly Song / Reuters Photos)
Analysts at Credit Suisse said they believed COVID’s control measures were putting consumption in a downward spiral, writing in a research note from April 19: “We, the consumer sector, are at high risk of a prolonged pandemic and more further tightening continues in China. ”
City officials across China are trying to alleviate these problems by artificially sustaining demand by giving residents millions of dollars in shopping vouchers to boost spending.
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Guangdong on Friday, for example, began subsidizing up to 8,000 yuan ($ 1,200) to boost sales of “new energy vehicles” such as Volkswagen and BYD.
Many Chinese have celebrated a quiet May Day this year as the government’s “zero COVID” approach restricts travel and imposes a blockade. Only a small stream of visitors strolled the pedestrian streets on Sunday in Beijing’s historic Qianmen district, which would normally be bustling with tourists during a national holiday and a sunny spring day.
Police and security guards in protective suits stand in front of cut-off grocery stores following the coronavirus disease epidemic (COVID-19) in Shanghai, China, March 29, 2022 (REUTERS / Aly Song / Reuters Photos)
According to an order issued the previous afternoon, all restaurants in Beijing were closed to guests on Sunday and can only offer home-cooked food and delivery until the end of Wednesday’s national holiday.
The big fire in Shanghai, where the number of deaths exceeded 400, seems to be weakening. The city registered about 7,200 new cases of local broadcasting on Saturday, which is lower than the peak of 27,605 on April 13. Outside of Shanghai, only 364 new cases have been found in the rest of mainland China.
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Beijing, which has registered 350 cases in the past nine days, is limiting its efforts to try to prevent a major outbreak and avoid a blockade across the city, much like Shanghai. Separate buildings and residential complexes with coronavirus infected are sealed. Gyms and theaters are closed for the holidays. Visitors to many office buildings and tourist sites such as the Great Wall must show evidence of a negative COVID-19 test in the previous 48 hours.
The Associated Press contributed to this report.
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