Russia’s war in Ukraine is shaking up the global economy as policymakers race to rein in high inflation.
But China’s response to its worst Covid-19 outbreak in two years is a reminder that conflict is not the only risk to recovery.
The world’s second-largest economy is pushing ahead with its “zero-Covid” strategy, even as many other governments decide it’s time to learn to live with the virus.
Shenzhen, a major tech hub, entered a week-long lockdown after the city reported 66 positive cases on Saturday.
All businesses except those deemed essential have either paused operations or implemented work from home.
Shanghai, China’s biggest business hub, also imposed strict measures after a spike in cases, closing schools and cinemas and restricting travel to the city.
Who gets hit: Foxconn, one of Apple’s biggest suppliers, has suspended operations in Shenzhen, where it has two main campuses.
He said on Monday that the date on which work at the factory will resume will be “advised by the local government”.
The Taiwanese company said it moved production to other locations to “minimize the potential impact” of the disruption, but did not specify which locations will have extra work.
The uncertainty surrounding Foxconn’s output is a sign of how China’s response to the jump in coronavirus infections will spread across the world. The country reported 2,125 local cases on Sunday in 58 cities.
The lockdowns in China could further increase container shipping costs, which remain extremely high, and disrupt global supply chains that are still trying to resolve pandemic-related delays.
“If there is a case found in the port of Yantian [em Shenzhen]there could be a suspension of the port for at least two weeks,” economists at ING told clients on Monday.
“This will affect exports and imports of electronic parts and goods.”
This could further worsen inflation. Spending within China, an important engine of the country’s growth, could also be affected by a new wave of restrictions on Covid.
“This is certainly the worst virus situation in China since the Wuhan lockdown and threatens growth prospects as domestic consumption takes another hit,” Commerzbank economists Hao Zhou and Bernd Weidensteiner said on Monday.
Remember: China’s growth target of around 5.5% this year was already the lowest in three decades.
The country’s economy grew by 8.1% in 2021, but the pace of growth dropped sharply in the final months of the year.
Source: CNN Brasil

I am Sophia william, author of World Stock Market. I have a degree in journalism from the University of Missouri and I have worked as a reporter for several news websites. I have a passion for writing and informing people about the latest news and events happening in the world. I strive to be accurate and unbiased in my reporting, and I hope to provide readers with valuable information that they can use to make informed decisions.