HONG KONG (Reuters Breakingviews) - China’s battle against Covid-19 is set to deliver the world economy another blow on top of the war in Ukraine. Chinese manufacturing hubs are seizing up as authorities stamp out fresh outbreaks. Despite talk about diversifying supply chains, the world’s dependence on Chinese factories has only increased.
Roughly three-quarters of China’s top 100 cities - accounting for over half of national GDP - have implemented varying degrees of pandemic restrictions as of April 6, according to research firm Gavekal. Most of Shanghai’s 26 million residents were confined to their homes for over two weeks, which has shuttered warehouses and curbed access to the world’s busiest container port; iPhone supplier Pegatron has halted production at two of its nearby plants. Extreme measures were also deployed in March across Jilin province, a vital corn producer and home to Toyota and Volkswagen factories. Export powerhouse Guangdong is bracing for another hit, restricting travel, closing schools and rolling out mass testing.
The plan is to completely suppress contagion at whatever the cost. Draconian lockdowns enabled China to quickly restart factories after the early outbreak in 2020, but the Omicron variant is more contagious.