COVID: Shanghai lockdown threatens economy, business leaders warn | News | D.W.

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 clogged supply chains. “If Shanghai is still unable to resume work and production, starting in May, all industrial and technological players related to the Shanghai supply chain will be completely shut down, especially the auto industry!” Richard Yu, head of Huawei’s consumer and automobile segment, on the WeChat social media platform.

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 shock waves.

Shanghai has been at the epicenter of China’s struggle to contain its outbreak, as authorities recently tried to relax some restrictions to quell discontent from residents. But health officials warned this week that despite a slight decline in infections, Shanghai did not have the virus under control.

China’s growth is expected to slow

Beijing has responded to criticism of its strategy, at a time when the United States 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. “Persistence is victory,” she concluded.

But COVID restrictions in the regions that produce the world’s smartphones, consumer electronics and other goods have prompted forecasters to cut China’s economic growth projection to a low of 5%, well below the target. expansion of 8.1% from last year.

The figure is lower than the ruling party’s target of 5%. China’s growth stood at 4% in the final quarter of 2021 after tighter government controls on debt triggered a collapse in home sales and construction, industries that support millions of jobs.

Affected automotive industry

Chinese automakers have warned that production could be halted if Shanghai’s COVID restrictions continue.

“If supply chain companies in and around Shanghai cannot find a way to dynamically resume work and production, all original equipment manufacturers may have to stop production in May,” said the head of Xpeng, He Xiaopeng, Thursday on social media.

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

Covid restrictions have also affected foreign manufacturers. Volkswagen said it had been “badly affected by the Covid-19 outbreaks in Changchun and Shanghai,” and the company was “temporarily unable to meet high customer demand,” CEO of China operations Stephan Wollenstein said on Thursday.

Neighbors clash with authorities

Most Shanghai stores remained closed on Friday, with the exception of some shops with half-open shutters that sell goods through delivery men.

Residents on lockdown have 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 spaces, sparking anger.

Residents got into a fight with police in special suits who ordered them to give up their homes, videos on social media showed. Authorities have tried to crack down on social media posts through censorship.

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

jcg/kb (Reuters, AFP, AP)