People wearing face masks to help protect against coronavirus walk past a wall displaying promotional posters on their way to work in the Central Business District during busy morning hours
Highlight
- Nearly 400 million people in 45 cities in China are in complete or partial lockdown
- There have been food shortages due to quarantine, inability to access medical care among others
- Incoming cargo is now stuck at Shanghai’s sea terminals for an average of eight days
As part of China’s strict zero-Covid policy, about 400 million people in 45 cities in China are under complete or partial lockdown. They represent 40 percent of the annual GDP for the world’s second-largest economy, or $7.2 trillion, according to data from Nomura Holdings, CNN reports.
Analysts are sounding warning bells, but say investors are not properly assessing how severe the global economic fallout from these prolonged isolation orders could be. “Global markets may still be underestimating the impact, as the Russia-Ukraine conflict and the US Federal Reserve are more focused on rate hikes,” Nomura’s chief China economist Lu Ting and colleagues wrote in a note last week. “
The indefinite lockdown in Shanghai, a city of 25 million and one of China’s premiere manufacturing and export hubs, is at its worst. Quarantines there have reported food shortages, inability to access medical care, and even the killing of pets. The port of Shanghai, which handled more than 20 percent of Chinese freight traffic in 2021, is essentially at a standstill. CNN reported that food supplies stuck in shipping containers without refrigeration are rotting.
Incoming cargo is now stuck at Shanghai’s sea terminals for an average of eight days before it has to be moved elsewhere, a 75 percent increase since the start of the most recent lockdown period. According to supply chain visibility platform Project44, export storage times have fallen, but this is likely because no new containers are being shipped from warehouses. Cargo airlines have canceled all flights in and out of the city, and more than 90 percent of trucks supporting import and export deliveries are currently out of action.
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