China’s Covid troubles aren’t going away

The crisis unfolding in Ukraine has shunted the pandemic down the news agenda for many in the West, but not for the 25 million residents of Shanghai, who are back under a draconian lockdown – indefinitely.

The streets of China’s bustling financial centre are now deserted, with citizens forbidden from setting foot outside of their homes since 31 March, even to buy food. Shanghai reported a record 20,000 new Covid cases on Thursday.

Drones with loudspeakers, hovering between blocks of high-rise flats, have been ordering residents to “control your soul’s thirst for freedom.”

Public anger is surging in line with infections. Chinese citizens have taken to the internet to complain about struggling to access medical care or order daily essentials online, amid food shortages.

Footage has surfaced on Chinese social media showing some residents breaking out of confinement in protest, chanting “we want freedom” and “why are you starving us?” Many of these videos have been removed within minutes of being uploaded. 

Since March, China has been scrambling to contain its biggest Covid wave since the pandemic began. Several cities have re-entered lockdowns, but in most areas restrictions eased by early April. In Shanghai, however, authorities have struggled to get cases under control. 

Throughout this entire wave, a total of just two Covid deaths have been officially reported – both coming from the north-eastern city of Jilin back in March. But the residents of Shanghai are still bearing the brunt of China’s decision to stick to a strict zero-Covid policy. 

Another indefinite lockdown in mainland China’s most important financial hub is a grim setback for the country’s economic recovery. 

Lost business at retailers, hotels, and restaurants is expected to directly cost Shanghai 3.7% of its annual GDP. 

As well as containing the world’s busiest shipping port, Shanghai is also a hub for semiconductor, electronics and car manufacturing. Many of these factories have halted production, including at Tesla’s giga factory – a crucial export site – which has been shut down since March. 

Last month, when the technology hub Shenzhen and industrial city of Jilin also faced lockdowns, China’s factory output slumped to its lowest in two years. Analysts are warning that China will struggle to meet it 5.5% growth target this year.

And the ripple effect of supply chain disruptions is set to impact the global economy. 

Airlines are cancelling cargo flights from Shanghai’s Pudong airport and ocean shipping is experiencing delays. The trucking industry has been severely disrupted, thanks to a shortage of drivers to deliver goods to ports. Flight activity into Shanghai Pudong airport is currently running at just 3 per cent the normal rate.

A number of manufacturing and financial service industries have resorted to extreme measures to prevent closures, but it’s meant gruelling conditions for workers. 

These companies have continued operations by implementing a “closed-loop” system, meaning employees have been forced to live, as well as work, at their office or factories. 

The longer Beijing cleaves to its zero-Covid policy, the greater the drag on the country’s economy. But at the moment there’s no sign they are considering a shift in approach.