However, Wu the economist cautions that there will likely be supply shortages of some consumer goods in the U.S. He Xiaopeng, CEO of Electric vehicle company Xpeng, underscored the warning, saying that Chinese automakers may have to halt production in May.ĭavid Dollar, a senior fellow at the Brookings Institution, says that while specific sectors such as autos will suffer, the hit to the global growth rate should not be too severe.Īs for inflation, “some specific products will continue to have price spikes,” he says, but “American consumers can look forward to inflation gradually tapering as the Fed tightens monetary policy.” “That will pose severe consequences and massive losses for the whole industry.” “If Shanghai cannot resume production by May, all of the tech and industrial players who have supply chains in the area will come to a complete halt, especially the automotive industry,” he said in a WeChat post. Read More: China’s Deepening Showdown With COVID-19 Richard Yu, a top Huawei executive, warned last week that China’s zero-COVID policy might trigger “massive losses” and hit the global supply chain. Those same restrictions, he adds, are now “also affecting the country’s industrial production and export activity, which will amplify the ongoing global supply disruptions.” “China’s COVID restrictions are weighing heavily on its domestic demand, which has already been weak even before the recent Omicron outbreaks and lockdowns,” says Tommy Wu, a lead economist from Oxford Economics based in Hong Kong. “We must be aware that with the domestic and international environment becoming increasingly complicated and uncertain, economic development is facing significant difficulties and challenges,” it said in a statement. “The already extensive disruptions to global supply chains are being exacerbated by the lockdowns in China, adding to inflationary pressures and difficulties in procuring a broad range of consumer goods,” says Eswar Prasad, a professor of economics and trade policy at Cornell University and the former head of the IMF’s China Division.Ĭhina’s first-quarter GDP rose 4.8% according to data released Monday by the National Bureau of Statistics, but the bureau warned of economic headwinds. Read More: My Daughter Was Alone in the Hospital for 5 Days.’ Chinese Parents Protest Child Separation for COVID-19 That’s causing concern about the impact on China’s domestic economy-and the global one. Industrial cities and trading ports-including vital hubs like Changchun, Jilin, Shenyang, Tianjin, Shenzhen and Guangzhou-have shuttered businesses, imposed travel restrictions, or told residents to stay home.
That means that cities across the country will continue to face restrictions as authorities struggle to keep a lid on increasingly transmissible variants.Īs of April 19, more than half of China’s biggest cities were under some form of lockdown.
Official pronouncements underscore China’s determination to stick to its zero-COVID policy. Other residents, forced to isolate at home, are finding it difficult to source food and other essentials from overwhelmed delivery services.
Meanwhile, some areas are being evacuated for district-wide disinfection and mass transfers to quarantine centers are causing widespread disruption. Electronic alarms are reportedly being installed at the homes of people testing positive, to prevent them from leaving.
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