COVID: Shanghai lockdown threatens economy, business leaders warn | News | DW

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 has warned of bottlenecks in supply chains. “If Shanghai continues to be unable to resume work and production, from May all technology and industry players involving Shanghai’s supply chain will shut down completely, especially the automotive industry!” Richard Yu, head of Huawei’s consumer and automotive segment, said on social media platform WeChat.

COVID controls have shuttered some of China’s biggest cities, fueling public irritation, threatening an already weakened economy and prompting warnings of possible global shockwaves.

Shanghai has been at the epicenter of China’s fight to contain its outbreak, as authorities recently sought to ease some restrictions to assuage resident discontent. But health officials warned this week that despite a slight drop in infections, Shanghai did not have the virus under control.

Chinese growth is expected to slow

Beijing has hit back at criticism of its strategy, at a time when the United States and other governments are abandoning restrictions and trying to live with the virus.

“The 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 producing smartphones, consumer electronics and other world goods prompted forecasters to cut China’s economic growth projection to just 5%, down sharply from the previous year. 8.1% expansion from last year.

This figure is below the ruling party’s target of 5%. China’s growth came in at 4% in the final quarter of 2021 after tighter official controls on debt triggered a slump in home sales and construction, industries that support millions of jobs.

Automotive industry affected

Chinese automakers have warned there could be a halt to production if Shanghai’s COVID restrictions continue.

“If supply chain companies in and around Shanghai fail to find a way to dynamically resume work and production, all original equipment manufacturers may have to stop production in May,” Xpeng chief He Xiaopeng said on social media on Thursday.

Xpeng has been touted as a Chinese challenger to US electric car giant Tesla.

Covid curbs have also hit overseas manufacturers. Volkswagen said it was “severely affected by the Covid-19 outbreaks in Changchun and Shanghai” with the company “temporarily unable to meet strong customer demand,” China operations CEO Stephan Wollenstein said Thursday.

Residents clash with authorities

Most stores in Shanghai remained closed on Friday, except for some stores with half-open shutters selling goods through delivery drivers.

Locked-in residents expressed their frustration on social media over the lack of food and medicine. Authorities announced on Thursday that they would convert residential apartments into quarantine space, sparking anger.

Residents fought with police in protective gear ordering them to surrender their homes, videos showed on social media. Authorities have attempted to clamp down on social media posts through censorship.

In an unverified viral video, a drone allegedly deployed by authorities is seen flying through a residential area urging residents to “control your soul’s desire for freedom”.

jcg/kb (Reuters, AFP, AP)

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