For the first time in nearly a month, Splash returns to the thorny topic of China and covid lockdowns today.
Covid flareups are being reported across the world’s most populous nation, with a three-day mass testing of millions of citizens in Shanghai underway, the 13m people in the northwestern city of Xian back under partial lockdown and growing numbers of cases reported in the capital, Beijing.
Japanese bank Nomura has estimated that at least 114.8m people are under full or partial lockdown nationwide as of Monday, a sharp jump from last week’s 66.7m.
With the lifting of Shanghai’s two-month-long lockdown last month, there was speculation that China’s leadership might ease its zero covid policy. What has emerged in the intervening weeks is a more dynamic, localised approach to stamping out flareups, with housing compounds or municipal districts targeted rather than city-wide clampdowns.
114.8m people are under full or partial lockdown nationwide as of Monday, a sharp jump from last week’s 66.7m
“Even if there are more lockdowns, we expect these to be a lot more localised than the ones in March to May, as the government is trying to balance controlling COVID and growing the economy,” a new report from Dutch bank ING speculated.
The Yangtze River Delta has seen a spike in covid cases, a concern for global supply chains as the area is one of the most important for manufacturing in the world.
“While the latest outbreak still remains limited, further spread and new restrictions in a region that accounts for a quarter of the country’s GDP could derail the country’s fragile recovery,” suggested a markets commentary from Shipfix yesterday.
China’s strict covid policies have seen manufacturers increasingly talk up prospects of moving factories elsewhere, both to nearby Asian countries as well as back to Europe and the US. The construction of new manufacturing facilities in the US has soared 116% over the past year, dwarfing the 10% gain on all building projects combined, according to new data from Dodge Construction Network.