The Chinese Zero-Covid policy, carried out to prevent any community spread of the virus, has kept almost 28 million people in Shanghai trapped in their homes for the past weeks.
The richest city in China has reached an unthinkable scenario. Shangarians rage out their windows complaining about food shortage, starvation and even deaths of easily preventable diseases. The frustration and despair witnessed are countered with “control your soul’s desire for freedom” messages and robot patrols.
Now entering the fifth week of lockdown and with the covid cases increment, new restrictions and measures have been put in place. Electronic door alarms as well as evacuation procedures for disinfection purposes are examples.
It goes without saying that the bustling financial and manufacturing centre is on hold and that the world’s busiest shipping port is now not as active as it used to be. Xu Tianchen, China economist for the Economist Intelligence Unit has already commented on that and recognized the situation’s inevitable impact on the economy.
“There will also be ripple effects elsewhere because of the interconnectedness between Shanghai and other regions of China, especially the manufacturing hub of the Yangtze River Delta,” he said.
Different industries carried out different approaches to the circumstances. The financial services and car manufacturers, for example, imposed closed-loop living, as their employees live and work at the offices/factories, creating a bubble.
Looking at the financial situation, data from the Chinese government showed a record bond-market retreat by foreign investors in recent months and exhibited $17.5 billion worth of portfoliooutflows last month.
As the world’s second largest economy and the world’s largest exporter, China’s impact on the world is no longer much of a surprise these days. While struggling to meet the 5,5% increase in GDP, future international economic shakedowns are foreseeable.
Gerard Lyons explained in his article “How China’s decisions today shape the world of tomorrow”, that the three words that became dominant globally for the first decade of this century were “made in China”. And as we emerge from the pandemic, the uncertainty about prospects for the global economy and how behaviours may change is affected by this Zero-Covid Policy.
BBC News. (2022, April 20). Why Shanghai has abandoned its ‘relaxed’ approach to Covid https://www.bbc.com/news/world-asia-china-61023811
BBC News. (2022, April 4). China: How is its zero-Covid strategy changing? https://www.bbc.com/news/59882774
Financial Times (2022, April 27). How China’s decisions today shape the world of tomorrow
Students of the Bachelor’s Degree in Economics
Nova School of Business and Economics