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China, Covid-19 and coercion

Daryl Guppy
Daryl Guppy5/12/2022 11:28 PM GMT+08  • 6 min read
China, Covid-19 and coercion
Photo: Bloomberg
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The prolonged lockdown in Shanghai — and now beginning in Beijing — is just one of the problems facing the Chinese economy. The long, slow Covid-19 grind is having a significant impact on business with manufacturers unable to access raw material, and, if they can, then they are unable to transport the finished product.

Many readers will be familiar with the shipping traffic displays that show the port congestion in Shanghai, Tianjin, Dalian and every other major Chinese port. This is not just an economic problem for Western businesses reliant on Chinese products. It is a major problem for those Chinese businesses — and joint venture businesses — that rely on exporting their products.

The economic effect of these lost business opportunities and interruptions to business activity is no longer just a ripple. It is a spreading tidal wave that cascades down the economy, from the factory floor to the sidewalk café that provides workers with jian bing snacks for breakfast. It is also an economic force strong enough to reverse the flow of people from the country-side to the city as displaced and unemployed workers return to their home towns and provinces.

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