Confinements, the other threat to Beijing

Posted on April 18, 2022 at 4:14 PMUpdated on April 18, 2022 at 5:18 pm

Closed since March 28, the Tesla gigafactory located in Shanghai is preparing to resume service. The employees were called to the factory on Monday. They will have to live there 24 hours a day, in accordance with “closed circuit management” requirements to stay safe from Covid-19. Over the weekend, Shanghai authorities issued guidelines as well as a list of 666 companies (including 13 factories of French companies) authorized under strict conditions to resume or continue work. The main affected are the automotive, semiconductor and medical equipment sectors.

Shanghai’s strict containment, which is entering its fourth week, has swept everything from production to consumer spending (excluding food) and production. The automotive sector is one of the most affected. He Xiaopeng, head of electric vehicle maker Xpeng, sounded the alarm. “If suppliers in and around Shanghai don’t find a way to resume operations and production in May, all Chinese automakers may have to stop production,” he wrote on WeChat.

Avoid the fate of Shanghai

On April 9, Nio, whose factory is located in Anhui province, had to suspend production, not because of the confinement of the site but because its suppliers, located in Jilin (north China), in Jiangsu (north of Shanghai) and in Shanghai itself, too many difficulties were encountered.

If the focus is on Shanghai, lockdowns and other restrictions are extended. Other cities in the country imposing limitations on activities and mobility in the hope of keeping the virus under control and avoiding the fate of economic capital.

Changchun confined since early March

Access to Guangzhou, an industrial city of 19 million people in the south of the country, was suspended last week after dozens of cases of contamination. The city of Suzhou, a hub of smartphone manufacturing and other high-tech industries west of Shanghai, recently advised its 18 million residents to stay home. In northern China, the city of Changchun, another automobile hub, has been in full residential lockdown since early March. On Saturday, the metropolis of Xi’An (13 million inhabitants), totally confined in December, was once again under a bell for four days.

According to a study by the Gavekal cabinet, only 13 of China’s top 100 cities had not imposed any anti-Covid restrictions on April 6. Another 74 cities, representing 54% of the country’s GDP, had imposed restrictions (more or less severe) on movements and activities. “The huge economic cost that Shanghai is currently bearing as it tries to eradicate the virus is an instructive example for other localities, notes Ernan Cui of Gavekal Dragonomics. They now have even more incentive to take tough measures at the outset, in order to avoid a complete lockdown. »

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