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Thursday, September 19, 2024

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Endless Lockdowns in China and Their Effects

Economics

2023/11/27

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11/27/2023

Recently, there was a 7-day lockdown in the Foxconn factory located in Zhengzhou, China. The factory is responsible for 60% of iPhone production worldwide and hundreds of thousands of people work in the factory. Still, just 40 COVID-19 cases managed to halt the production of one of the most popular smartphones, which led to the escape of employees who could not withstand the strict regulations. This is the case for many other Chinese cities, including major economic hubs like Shanghai and Beijing. Although most countries are now ending the lockdowns with COVID-19 cases decreasing, China is sticking to its zero-COVID policy by strictly managing all cases. Then, what are the effects of the endless lockdowns in China?

It is obvious that strict lockdowns are harmful to the economy since people are restricted from earning and spending money. Because the entire city goes through a lockdown if someone tests positive, the negative effects of the lockdowns are significantly greater compared to other countries. The lockdown added to the recent recession caused by the increase in interest rates by the U.S. federal bank meant that China’s economy had a hard hit. While the Chinese government expected the economic growth rate to be 5.5%, the current growth rate is far below: 3%. Also, retail sales, which is an indicator of domestic consumption, decreased by 0.5% last month. This was the highest rate of decrease since the full lockdown of Shanghai six months ago.

Like this, the economy of China is heading in the opposite direction of other countries that are slowly recovering from the effects of COVID. The recent lockdowns are affecting the global economy as well. With exports being banned due to lockdowns, China has stopped working as the “factory of the world”. Currently, numerous important facilities like factories and ports are not active. As a result, other countries are facing logistics issues since their trade with China came to an abrupt stop.

The lockdowns are not only affecting the economy of China, but they are also affecting the daily lives of Chinese citizens. The citizens fear COVID-19 more than necessary since people who get infected need to go through long and strict quarantines. When they come out, they need to face harsh criticism from other citizens for causing the lockdown. The Chinese government created this fear by trying to prevent COVID cases at all costs. For example, just one month ago in Shanghai Disneyland, tourists were stuck in the park for 3 days until everyone tested negative just because of one person who tested positive.

In addition, the endless lockdowns are making the citizens less patient. In Xinjiang, when there was a fire in an apartment building, the firefighters could not enter because the apartment was under lockdown. After the spread of the video footage, the Xinjiang citizens started a protest with people chanting “end lockdowns” and “without freedom, I would rather die”. Across the entire country, the dissent towards the government’s zero COVID policy is continuing to grow. The Chinese government responded to these protests by stating that the lockdowns will soon ease, but it does not seem likely.

However, despite these strict regulations, COVID cases in China do not seem to decrease. It will be very difficult for China to suddenly get rid of its zero-COVID policy since there were already a lot of sacrifices to keep the number of cases to a minimum. Also, it will require a lot of time to convince the citizens that COVID is not a serious disease anymore. As shown in almost all countries around the world, it is likely that the Chinese government will not be able to handle the spread of COVID as they planned. Especially considering its effects on the economy and citizens, the preparation for the unstoppable spread of COVID will soon be inevitable for China.

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