The economic issues caused by the covid lockdowns

The global supply chain was significantly impacted by covid lockdowns, primarily in China. A recent outbreak in Shenzen which led to a six day lockdown has sent ripples through the Chinese and global economy. This is due to the fact that a third of the world’s manufacturing base is in China; with Shenzen being a pivotal part of the link.

Whilst there are concerns about China’s swift reactions to covid outbreaks, the length of lockdown is usually short and normal production returns quickly. China has adapted well through the lockdowns and the most recent one has not impacted as significantly as previous ones on manufacturing output. Many factories have adapted to this. Foxconn has created bubble factories so workers are not coming into contact with people outside the workplace. This has allowed production to continue. However, the main issue is that the company relies on parts from other countries so this has been an issue with boats being docked and materials unable to be transferred to the factories.

The recent lockdowns have put international pressure on the Chinese government. Many criticise the “zero-covid strategy” due to the impact it has on the economy. The Chinese president has stated that it doesn’t want the lockdowns to impact the economy. Whilst the world looks on as to how China continues to navigate through the covid situation, some large corporations are considering moving their operations out of the country to protect their profits.

For more on this article, check out the
BBC news article.