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China's 37 Million People Are Locked Down, The Risk Of Global Supply Chain Disruptions Doubles

Mar 19, 2022

The epidemic situation in China is still expanding rapidly, and the prevention and control of the epidemic situation in various places has become increasingly strict. Currently, 37 million people in China are living under lockdown. Such massive restrictions on movement of people and abrupt halts in economic activity not only deal a severe blow to China, the "world's factory," but also greatly increase the risk of disruption to global supply chains.


According to the official notification from the National Health Commission of China on March 16, from 0 to 24:00 on March 15, there were 1,952 new confirmed cases and 1,338 new asymptomatic infections. As of Tuesday, 21 provinces and cities, including Beijing, Shanghai and Shenzhen, had reported confirmed cases, with the northeastern province of Jilin being the worst hit, with half of the infections coming from Jilin. Officials warned on Tuesday that Jilin's outbreak has not yet peaked.


CNN reported that although China's outbreak was only in the thousands in a single day, as of Tuesday, 37 million people were under lockdown across the country.


In Changchun, Jilin, Shenzhen, and Dongguan, the major automobile towns in Jilin Province, residents are strictly prohibited from leaving the community except for emergency services and essential personnel, and only one person per household is allowed to go out to buy food every two to three days. The city of Langfang in Hebei is even stricter, prohibiting all residents from leaving their homes unless there is an emergency.


Although this wave of epidemics in China is dominated by the highly contagious but mildly ill or even asymptomatic mutant strain of Omicron, China has so far adhered to the "zero tolerance" "dynamic clearing" epidemic prevention policy, while Not "coexisting with the virus" like most countries in the world.


The governor of Jilin Province, Han Jun, vowed on March 14 to achieve a social cleanup within a week, but was ridiculed by social media. Many called it an empty promise, while others urged the government to address more pressing issues first, such as shortages of essentials such as food and medicine.


Some netizens reminded officials of Jilin Province not to repeat the unprecedented chaos and suffering that Xi'an City experienced a few months ago in order to achieve "dynamic clearing". Xi'an, with a population of more than 13 million, was closed for more than a month from December last year to January this year. Due to the lack of preparation, a large number of citizens were unable to obtain food and many necessary supplies, and even emergency medical care and treatment.


According to the Associated Press, Chinese and Hong Kong stock markets fell in a row after Shenzhen closed on Monday. Shenzhen and Dongguan are important technology and manufacturing centers in China. Changchun in Jilin Province is the automobile manufacturing center in the northeast. China's commercial capital and largest city, Shanghai, closed its districts, and bus traffic to Shanghai was basically suspended.


The Associated Press said that China's counterattack and severe epidemic prevention measures come at a time when the global economy is under severe pressure due to Russia's invasion of Ukraine, oil and other energy prices have skyrocketed, and consumer demand has weakened.


The report quoted economists' analysis as saying that apart from a nuclear war, there is no greater risk to the global economy than China's new coronavirus epidemic, because China occupies an important position in the global manufacturing supply chain.


For now, smartphone makers and other industries can still use supplies from factories and suppliers in other parts of China, economists say. But a bigger threat will come if operations at Shenzhen, Shanghai and the Ningbo port near Shanghai are disrupted.


Factories in China manufacture and assemble most of the world's smartphones, computers, medical equipment, home appliances and other technical products. And Chinese ports connect these factories with component suppliers and customers around the world. Last year, Shenzhen's Yantian Port experienced a month-long lockdown and slowed operations due to the outbreak, resulting in a backlog of thousands of containers, severely affecting the global supply chain.


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