China – covid & supply chain impact

April 6, 2022
Covid-19 lockdowns in China threaten global supply chain.

This is a risk to global supply chains.

Aaditya Mattoo, Chief Economist for the East Asia and Pacific Region at the World Bank, on the impact of Covid-19 in China.
  • Around 26 million people are in lockdown in Shanghai, China's largest city. China relies on a zero-tolerance method for Covid-19, meaning that they implement extensive testing, mandated lockdowns, and isolation of all suspected cases as well as close contacts.
  • Its impact on the service sector: A gauge of service sector activity in China was published on Wednesday and showed levels at their lowest since February 2020.
  • Non-essential businesses are closed. The city's port has remained open, although operations are slower due to limited workers.

Why It Matters: Authorities have extended the lockdown in Shanghai, which is a major industrial hub and port. Alex Holmes of Capital Economics warns that “the possibility of major disruption to supply chains remains a large and growing risk" as lockdowns continue.

Covid outbreak 'extremely grim' as Shanghai extends lockdown (Associated Press)

Shanghai’s ‘grim’ Covid outbreak threatens more global supply chain disruption (The Guardian)

by Jenna Lee,