China is currently facing the worst COVID-crisis even after containing the spread during most part of the initial crisis. Now, millions of people are going into hard lockdown with a surge in cases
in the northeastern province of Jilin, where 24 million people reside, southern cities, Shenzhen, with 17.5 million people and Dongguan with 10 million people approximately are locked down. On Tuesday, at least 13 cities were under full lockdown. Even the northern city of Langfang’s residents, totalling upto 5.5 million were told to stay indoors.
China reported 1,437 cases across several cities on Monday and that number jumped, almost doubling on Tuesday, with 5,280 cases reported. The omicron variant outbreak in Jilin reported 895 cases and now that region seems to be the worst hit area, reporting 3,000 cases alone on Tuesday.
China has strictly pursued a covid-zero strategy, which focuses on tough localized lockdowns and the country is showing no sign of living with the virus. Tommy Wu, of Oxford Economic, said in a briefing note, “The recent covid outbreak and renewed restrictions, notably the lockdown in Shenzhen, will weigh on consumption and cause supply disruptions in the near term.” In addition, he also stated that it will be “challenging” for China to meet its GDP growth target of 5.5 percent for 2022. This observation may be relevant since Professor Michael Song from Hong Kong’s Chinese University estimated that the 2-month lockdown in Wuhan cost 2% of China’s GDP. The stock numbers are also concerning, closing at 21-month lows on Tuesday and oil prices decreasing to a two-week low.
Shenzhen is the tech hub area and has been under lockdown for three days of its seven day lockdown. The lockdown is threatening tech production, which is also known as China’s Silicon Valley and houses one of China’s key ports. The city will cover rounds of mass PCR testing for all the residents. During the lockdown, all public transport has been halted and businesses, except the necessary services, will be shut until March 20th.
Due to this lockdown, Apple supplier Foxconn has shut two of its plants and started production elsewhere. Foxconn said, “The date of factory resumption is to be advised by the local government. Due to our diversified production sites in China, we have adjusted the production line to minimize the potential impact.” Furthermore, Volkswagen Group factories in Jilin shut down three sites on Monday due to an outbreak.
Compared to Shenzhen, Changchun has a stricter lockdown, with residents being banned from leaving homes and only one person per household is allowed to go grocery shopping every second day.
Professor Heiwai Tang at Hong Kong University told the ABC news, “It seems the lockdowns will be shorter this time with more tracking, which means a short disruption of work and production. If it ends up lasting for weeks it’s another issue, including inflation risks.”
There’s huge pressure on the authorities to contain the virus, so much so that the Jilin City mayor and head of the Changchun city health commission were dismissed from their roles during the weekend. Not only that, but overall China has dismissed 26 government officials, including a deputy director of the provincial police department in Guangdong.
Shenzhen’s neighboring city, Hong Kong, is also facing a dangerous wave of omicron variants, recording 26,908 cases and 286 deaths on Monday. Hong Kong’s death rate is the highest in the developed world, partly because of the slow vaccination rate among the elderlies.
Currently, massive isolation facilities are being built in Hong Kong for people with mild symptoms. One facility was built in a week, containing 3,900 beds. In addition, Hong Kong is also following strict social-distancing measures and tight border measures. Over there, many businesses will be closed until April.