Lockdowns are sweeping across major metropolises in China, sparking renewed concern about manufacturing output from the world’s second largest economy.
Chengdu, the sixth-largest city in the People’s Republic with a population of 21.5m, entered full lockdown yesterday. The city, located in the western province of Sichuan, boasts factories from the likes of Toyota, Intel and Foxconn among many others. The lockdown is the largest seen in China since Shanghai emerged from a two-month lockdown in June.
Several other key economic centres including the port cities of Shenzhen, Guangzhou, Dalian and Tianjin have enacted various levels of restrictions this week.
Most of Shenzhen’s nearly 18m population is now subject to covid controls, while up north millions of Dalian citizens have been forced back to their homes this week.
“Covid hotspots are shifting away from several remote regions and cities – with seemingly less economic significance to the country – to provinces that matter much more to China’s national economy,” Nomura Holdings wrote in a new report.
Leaders in Beijing are widely reported as having scrapped their goals of securing a 5.5% improvement in GDP this year with most 2022 estimates now lying closer to 3%.
Nearly a quarter of European companies in China are considering shifting their investments out of the country thanks in large part to the nation’s strict covid policies, results from a survey released in June by the EU Chamber of Commerce in China said. Similar sentiment was echoed in other reports from American and British chambers of commerce.
