Yang Jianzheng | Visual China Group | Getty Images BEIJING – China’s Covid controls have disrupted supply chains and highlighted the daily lives of workers, especially in Shanghai and Xinjiang, according to a series of jokes from the EU Chamber of Commerce in China. Mainland China has struggled in recent weeks to control the worst Covid wave since the pandemic’s initial shock in early 2020. While rapid lockdowns have subsequently helped the country control the virus and return to growth, the latest outbreak comes from most contagious omicron variant. Shanghai, home to the world’s largest container port, launched a two-part lockdown on March 28 and has not yet announced when the restrictions will be lifted. EU Chamber members estimate that the volume of Shanghai ports is shrinking by about 40% each week, said Bettina Schoen-Behanzin, Shanghai’s president and vice-president of the Chamber, on Wednesday. He noted that while the port is “technically functioning as usual”, logistics still face challenges from the lack of truck drivers who are stuck in a lockdown or often need negative tests. The Shanghai International Port Group said in a statement on Saturday that the ships’ ability to reach designated points for unloading or loading cargo was more efficient than it was last year as a whole. As of March 28, the average waiting time for container vessels at the port was less than 24 hours, the port said. “Shanghai is in a state of emergency,” said Schoen-Behanzin. “There is a strong sense of uncertainty throughout the city. It is fueled by supply shortages, endless lockdowns and a really big fear of being sent to these quarantine camps.” In an effort to tackle the rise in cases, Shanghai authorities have set up makeshift quarantine centers. Schoen-Behanzin reported that people living in lockdown in the city had to wake up at 4 in the morning to compete for online vegetable deliveries. Companies licensed to operate – in the food, pharmaceutical or chemical industries – need to keep workers in a bubble around production facilities, Schoen-Behanzin said. “We hear more and more that some employees no longer offer volunteering since it does not exist [a] visible end and they do not want to eat and sleep in the area “, he said. Local authorities allowed similar stay-at-work policies during a lockdown of about a week last month at Shenzhen Southern Technology and Construction Center. Two days after the lockdown was lifted, Klauz Zenkel, president of the EU Chamber of Commerce in southern China, said a company he visited still had “lots and lots of rollaway beds” – which the company planned to keep ready because they were not sure if he needed them again soon. China’s Ministry of Commerce did not immediately respond to a request for comment.
Car supply chain jams
In the northern Chinese city of Shenyang, locals remained in lockdown for more than two weeks, according to local department chairman Harald Kumpfert. He said the BMW consortium in the city could initially maintain production, but had to stop indefinitely “because the supply chain could not be maintained”. “Any transport stops on the road,” Kumpfert said. “The police would catch you if you were on the street and did not have a special permit.” BMW did not respond to a request for comment from CNBC. Volkswagen, which has plants on the outskirts of Shanghai and in a major city in Jilin Province – also in a lockdown – said the two plants would be closed on Wednesday and Thursday. Kumpfert also told jokes during Wednesday’s online seminar that a member company could not get a loan because a bank said it was unable to provide loans due to the number of bankruptcies and bankruptcies. It was not clear about the size of the loan or the bank.
Limited impact at national level
Representatives of the EU Chamber of Commerce and Industry in southwestern and other parts of China experienced some supply chain disruptions, but overall less impact than Covid had on local operations. The chamber noted that they did not know what Covid’s situation was in rural China. Citi analysts said Wednesday they see a “significant impact on consumption” but less on production and investment from the Omicron wave in March. “Although Shanghai and Guangdong Province accounted for 7.3% and 23.1% of China’s exports and 14.4% and 18.5% of imports in 2021, we believe that the impact on trade is under control: “The lockdown in half of Shanghai started on March 28 and the Dongguan Shenzhen was completed within a week,” analysts said. They expect GDP growth of 4.7% in the first quarter, compared to a previous forecast of 3.8%. Last week, a survey of US companies in China found that 54% of respondents cut their 2022 revenue forecasts for the year due to the latest Covid-19 epidemic. Among manufacturers, more than 80% reported slowdowns or reduced production, as well as supply chain outages. The Beijing-based American Chamber of Commerce in China and its Shanghai counterpart conducted the survey last week.
Long-term challenges
Covid’s long-term impact in China – especially as the Shanghai lockdown persists – is talent retention, EU Chamber officials said. discourages new foreign staff from taking up jobs in China. Shanghai has been a hub for foreign business in the country, in part because of the city’s culture and systems – including a large number of international schools and hospitals. “Everyone is surprised that this happened in Shanghai. It is not Hunan’s middle. It is Shanghai,” said Joerg Wuttke, president of the chamber.
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Wuttke estimated that the number of aliens on the mainland has halved since the pandemic began and could drop again in half this summer. Overall, he expects that the total European population in the country has shrunk so sharply that it would fit in the Beijing Bird Nest stadium. The stadium has a permanent capacity of about 80,000 seats. The number of foreigners living in Beijing and Shanghai decreased by 41.5% and 21%, respectively, between the official censuses in 2010 and 2020. The total number of foreigners in the country increased during these ten years by about 40 % to 1.4 million people.
