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While China is trying to contain its worst COVID outbreak yet, lockdowns have only strained the economy with millions stuck inside. For example, Shanghai, which is the headquarters of some of the biggest companies in the world and a major port city, is currently a ghost town.
With drastic drops in flights, commodity purchases, manufacturing and technology shortage issues (to name a few), these are some other effects of the city’s lockdown:
- Natural gas purchases suffered the worst, dropping to the lowest level (below 8 million tons) since October 2020.
- Less than 2,700 active flights were recorded by Airportia (a live flight tracker), falling below the lowest report in 2020.
- Vegetable prices rose 17.2% in March, according to the National Bureau of Statistics.
Premier Li Keqiang warned local authorities of risks to economic growth on Monday, saying that they should “add a sense of urgency” when implementing existing policies. Owing to China’s firm hold on its COVID zero approach, strategy economists say growth will only be pushed down to 5% this year (for reference, the official target is around 5.5%).
“Global markets may still underestimate the impact because much attention remains focused on the Russian-Ukraine conflict and U.S. Federal Reserve rate hikes,” wrote Lu Ting, Nomura’s chief China economist, and colleagues on Monday.