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  • SideStreet Malta

How A Massive Lockdown In Shanghai Is Hurting China’s Economy

China’s strict ‘No Covid’ policy has led the Beijing government to a crossroads. Their recent decision to shut the city of Shanghai due to an outbreak of COVID-19 is now costing the country’s economy dearly.

Shanghai is one of China’s biggest manufacturing hubs and one of the world’s biggest trade hubs due to its massive port. China is still heavily reliant on river based transportation, something made difficult due to Shanghai being situated on the base of the Yangtze river delta, the base of one of China’s two main rivers.

The subsequent shutting of retail outlets and hospitality industries puts a fraction of the region’s annual GDP at risk and the wider disruption to internal supply chains poses a threat to China's economy. The closure of Shanghai’s port to international shipping is a factor that officials in Beijing are pondering intensely, as it slows down the export of goods to foreign countries. With China’s markets being extremely focused on export markets this could be one of the straws that could break the camel’s back, forcing the Chinese to abandon their ‘No Covid’ policy.

Do you think the Chinese should abandon ‘No Covid’?

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