Economists warn that further disruption could deliver another hit to the domestic and global economies.
China has imposed partial lockdowns in the major commercial hubs of Shanghai and Shenzhen as it grapples with a surge in COVID-19 cases, raising concerns of new global supply chains disruptions and threatening the country’s economic growth target.
A worker wearing PPE helps transport deliveries of food and other necessities from couriers to residents of Shanghai neighbourhoods under lockdown.Shenzhen, a major technology hub and home to companies such as telecoms giant Huawei, saw public transport halted on Monday as most big businesses and industrial parks locked down. The government has launched a testing program across the city of 17.5 million residents.
China has successfully contained smaller outbreaks of the delta and omicron variants over the last year, “If the lockdown is extended, China’s economic growth will be significantly affected,” Raymond Yeung, ANZ’s chief economist for Greater China, said. He noted that the latest partial lockdowns could affect half the activity of China’s GDP.A one-week lockdown of those regions could reduce GDP growth by as much a 0.8 percentage points, ANZ said.
While the border between Hong Kong and China is closed, social media posts in mainland China blamed residents of the former British colony for spreading the omicron variant into southern China. Many of China’s elderly are vaccinated with locally produced vaccines, but they do not have access to more effective mRNA vaccines. Experts have warned that this would result in high death rates if there was a major outbreak.
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