BEIJING — With mass COVID testing underway in Beijing after a virus outbreak, concerns are growing over the possibility of implementing lockdowns.
With Shanghai currently under lockdown and reporting 19,000 new infections in the past 24 hours, authorities in Beijing are under pressure to eradicate the outbreak as soon as possible.
The city is currently undergoing mass testing for almost all of its 21 million residents. Part of the city is locked down, as are some individual residential buildings.
“As cases erupt in Beijing, there are fears that prolonged shutdowns could hurt employment and lead to a marked slowdown in growth, as well as further shipping bottlenecks and supply chain issues,” Susannah Streeter, investment analyst at Hargreaves Lansdown, told the BBC.
In less than a week, several economists at major investment banks have lowered their expectations for Chinese growth. The country’s ‘zero-COVID’ approach adds to concern.
“The strictly enforced zero-COVID strategy is causing a big supply shock for the whole economy, especially for cities under full and partial lockdowns,” the bank’s chief economist said on Wednesday. Japanese investment Ting Lu in a report, CNBC reported.
“This supply shock could further weaken demand for housing, durable goods and capital goods due to lower incomes and growing uncertainty,” he said.
Apart from Shanghai and Beijing, more than 20 cities – home to around 30 million people – are on lockdown. Shanghai is home to the busiest port in the world.
China and Vietnam are virtually tied as the biggest furniture exporters to the US market, both exporting around $9.1 billion in home furniture in 2021 – and each accounting for 31% of the US market. But China’s numbers are growing slightly faster than Vietnam’s, rising 24% in 2021 from 2020. Vietnam’s numbers were 23% higher.
China’s well-equipped factories, highly skilled workforce and strong logistics will continue to keep it at the top of the list, even despite tariffs.
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