COVID case numbers have been rising in Beijing, leading to increased restrictions on the residents of the city as Xi Jinping looks to continue China's zero-COVID policy.
The ongoing Shanghai lockdown has had a negative effect on the supply chain and manufacturing within the country, leading to concerns in this area as restrictive measures spread to Beijing.
Michael Cunningham, visiting fellow at The Heritage Foundation’s Asian Studies Center, wrote that there are economic consequences to the zero-COVID policy.
"Strict adherence to this policy also carries risks," Cunningham said. "China's economy is already reeling from these lockdowns, and the longer they continue, the more difficult it will be to achieve the 5.5% growth target set at the annual legislative session last month."
Beijing closed Universal Studios earlier this week and banned indoor restaurant dining in an effort to stem the increasing number of caseloads in the city, according to Reuters. Mass testing is already taking place, and recent reports show that Beijing has shut down large swaths of public transportation and extended restrictions on public venues. Beijing has ramped up its COVID restrictions as Shanghai remains under lockdown, and Zhengzhou recently announced restrictions.
These shutdowns are having a large effect on Beijing's domestic production capability. According to The Wall Street Journal, Chinese manufacturing activity has fallen to its lowest levels since February 2020. Officials at China’s National Bureau of Statistics (NBS) said Saturday 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,” Zhao Qinghe, a senior official at the NBS, said. As a result, he added, the production and operation of businesses throughout the supply chain were greatly affected.