The ongoing lockdown in Shanghai could disrupt the country’s economy, business leaders warned on Friday as the central government doubled down on China’s “zero-COVID” strategy.
One of Huawei’s top executives warned of congested supply chains. “If Shanghai continues to be unable to resume work and production, all technology and industrial players involved in Shanghai’s supply chain will be completely shut down from May, especially the auto industry!” Richard Yu, Head of Consumer Affairs and Autosegments by Huawei, said on social media platform WeChat.
COVID controls have shut down some of China’s largest cities, fueling public irritation, threatening an already weakened economy and prompting warnings of possible global shockwaves.
Shanghai has been the epicenter of China’s efforts to contain its outbreak, as authorities recently attempted to ease some restrictions to quell residents’ discontent. However, health officials warned this week that Shanghai is not under control of the virus despite a slight drop in infections.
China’s growth is expected to slow down
Beijing returned criticism of its strategy at a time when the US and other governments are lifting restrictions and trying to live with the virus.
“Prevention and control work cannot be relaxed,” Xi said, according to the official Xinhua news agency. “Perseverance is victory,” he concluded.
But COVID restrictions in regions that produce smartphones, consumer electronics and other goods in the world have prompted forecasters to cut China’s economic growth forecast to just 5%, a sharp drop from last year’s 8.1% expansion .
The figure is below the ruling party’s target of 5%. China’s growth was 4% in the last quarter of 2021 after tighter official debt controls triggered a slump in home sales and construction, sectors that support millions of jobs.
car industry affected
Chinese automakers have warned there could be a halt to production if COVID restrictions continue in Shanghai.
“If supply chain companies in and around Shanghai don’t find a way to dynamically resume work and production, all original equipment manufacturers may have to halt production in May,” Xpeng boss He Xiaopeng said on social media on Thursday.
Xpeng has been touted as a Chinese challenger to US electric car giant Tesla.
Foreign manufacturers are also affected by Covid curbs. Volkswagen said it was “hard hit by Covid-19 outbreaks in Changchun and Shanghai,” with the company “temporarily unable to meet high customer demand,” Stephan Wollenstein, CEO of the Chinese operation, said on Thursday .
Local residents get into conflict with authorities
Most shops in Shanghai remained closed on Friday, with the exception of a few shops with half-open shutters selling goods via delivery drivers.
Locked-up residents have taken to social media to vent their frustration at the lack of food and medicine. Authorities announced on Thursday they would convert apartments into quarantine rooms, prompting anger.
Local residents tussled with hazmat-suited police officers who ordered them to vacate their homes, videos posted on social media showed. Authorities have attempted to censor social media posts.
In an unconfirmed viral video, a drone allegedly being used by authorities is seen flying through a residential area urging residents to “control your soul’s desire for freedom.”
jcg/kb (Reuters, AFP, `)
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