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In Numbers: The Economic Impact of Shanghai Covid Lockdowns

Officials have enforced strict lockdowns in China’s most important economic hub, Shanghai, and the pinch from resulting economic losses will be felt across the world

Workers in protective suits are seen next to residents lining up for nucleic acid testing, as the second stage of a two-stage lockdown to curb the spread of the coronavirus disease (COVID-19) begins in Shanghai, China April 1, 2022. Reuters
Workers in protective suits are seen next to residents lining up for nucleic acid testing, as the second stage of a two-stage lockdown to curb the spread of the coronavirus disease (COVID-19) begins in Shanghai, China April 1, 2022. Reuters


Strict Covid curbs have put 26 million lives on hold in Shanghai – China’s most important economic hub.

The resulting supply chain disruptions and revenue losses will spell fresh economic trouble for China and the world.

1. Shanghai GDP Hit

Shanghai’s outbreak is small by global standards but stringent rules are in place due to Beijing’s Zero-Covid plan.

Public transport in most of the city is suspended, restaurants and shopping malls are closed and airports are open but many flights have been cancelled.

Read more: Shanghai Data Shows Severe Retail Slump in March

Infographic on the year-on-year growth in Shanghai's gross domestic product in the first quarter of 2022

2. Manufacturing Snarls

Shanghai is an advanced manufacturing hub. It houses factories and suppliers of many companies like Semiconductor Manufacturing International Corp, Tesla, Apple, Siemens and Ford.

Most have either suspended production or are working at a fraction of their capacity.

Read more: Shanghai Industrial Output Drops for First Time in Two Years

Infographic on the year-on-year drop in Shanghai’s industrial output in March

3. Impact on China’s GDP

For the first time since the initial Covid-19 outbreak in February 2020, China’s official composite PMI – which combines manufacturing and services – fell to 48.8 for March 2022.

The 50-point mark separates contraction from growth. And the figure for April could be worse.

Read more: China March Slowdown Takes Shine Off First Quarter Expansion

Infographic on the estimated reduction in China’s GDP during Q1 2022 due to lockdowns and supply chain shocks

4. Carmakers in Trouble

For global automakers, these disruptions are piling on top of problems created by the Russian invasion of Ukraine.

In 2021, Shanghai accounted for 11% of China’s total auto output.

Carmakers like Tesla are trying to maintain production in their Shanghai plants by asking workers to sleep on factory floors.

Read more: China EV Makers Across Nation Reel From Shanghai Shockwave

Infographic on the value of gross automobile output lost by Shanghai due to Covid-related restrictions

5. IPOs Suspended

China’s exchanges say the pandemic’s return has hampered due diligence and information gathering.

As a result, 82 Chinese companies have had to suspend domestic listing plans.

Read more: Covid-19 Outbreaks Stall Shanghai, Shenzhen IPOs

Infographic on the amount of stock market fundraising that has been delayed in Shanghai and Shenzhen due to Covid-related disruptions

6. Financial Sector Under Threat

Brokerages and financial exchanges in China’s Wall Street – Lujiazui – have asked key personnel to sleep in offices due to lockdowns in Shanghai.

At least 20,000 bankers, traders and other workers are sleeping in offices, as a result.

Shocked by the severity of lockdowns, many bankers, traders and investors are now looking to shift to Hong Kong or other centres outside China.

Read more: Shanghai Bankers Head for Exits After Covid Lockdown Ordeal

Infographic on The percentage of US multinational companies in China reporting slower production due to a lack of employees or supplies

7. Global Supply Chains Disrupted

Shanghai is also home to the world’s busiest container port.

The shipping snarls caused by lockdowns threaten to disrupt the global supply chain for goods ranging from electric vehicles to flash drives and iPhones.

This will further fuel global inflation.

Read more: China Supply Chain Feels The Pressure – Chart of The Day

Infographic on the fall in the 14-day average ocean shipment volume at the Port of Shanghai

8. Stock Market Outflows

Investors are now jittery over fears of strict restrictions being imposed in the capital Beijing too.

Stocks in China saw their biggest slump in 27 months yesterday.

The Shanghai Composite Index tumbled 5.1% to close below the important 3,000-point mark.

Read more: Chinese Yuan Slips to One-Year Lows, Extending Losses

Infographic on the market value erased this year from ChiNext

  • Vishakha Saxena with inputs from Reuters


Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]

Aarushi Agrawal

Aarushi is an art director, design thinker & a great cook. She has been in the communications industry for more than 7 years and has an aptitude for picking up new skills and quickly adapting to new situations. She enjoys meeting new people and believes that to laugh is the best way to optimize life.


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