Shanghai has instituted strict lockdowns on its population of 25 million since early March, and new case numbers continue to come in as residents find it increasingly difficult to deal with the restrictions.
According to Reuters, Beijing has seen rising case numbers, with 58 new COVID cases that could lead to the Chinese government imposing similar restrictions such as Shanghai, which could derail the country’s supply chain, along with the manufacturing of goods.
CNN reported that there is already mass-testing taking place in the city with Beijing officials closing Universal Studios and prohibiting indoor restaurant eating in hopes of mitigating rising COVID cases.
Shanghai's fight against the outbreak “remains in a crucial stage,” as the situation is still “severe and complex,” Zhao Dandan, deputy head of the local health commission, said in a recent briefing, according to Bloomberg.
The Wall Street Journal reported that county’s manufacturing has dropped to its lowest levels since February 2020, with China’s National Bureau of Statistics reporting that its official manufacturing purchasing managers index dropped to 47.4% in April, from 49.5% in March. An index of 50% is the dividing line between expansion and contraction. This was noted to be a result of reduced or halted production due to COVID restrictions.
“Many enterprises reported increasing difficulties in logistics and transportation, as well as difficulties in the supply of major raw materials, poor sales of finished products, overstocking and so on,” Mr. Zhao said, according to the article, which will affect all facets of the supply chain.
According to the Wall Street Journal, Shanghai's international port has stayed open, but lockdown restrictions are hampering the supply chain, particularly truckers and warehouses with truckers afraid to enter the city out of fear that they will be placed on lockdown. The article noted that the cost of trucking in the country has risen by 10% due to oil prices.
According to The American Prospect, the country produces 28.7% of the world’s goods, as opposed to America which produces 16.8% of global goods, and the Global Banner noted that China’s COVID restrictions over the past two years derailed the global supply chain, which resulted in a surge of goods costing more as products had a difficult time being transported from warehouses to ports.