Lockdown nightmare in Shanghai is coming to an end – but Germany is still feeling the effects

Created: 06/01/2022, 11:24 am

By: Sven Hauberg

After the corona easing began, many people met on Shanghai's famous Bund promenade.

© Hector Retamal/AFP

Most of Shanghai's 26 million residents are allowed to leave their homes again.

However, the endless lockdown continues to put an enormous strain on the German economy.

Munich/Shanghai – Most of the approximately 26 million residents of Shanghai were locked in their apartments or residential complexes for two months.

Now China's economic metropolis is slowly opening up, the week-long lockdown is coming to an end.

Around 22.5 million people in whose residential areas there has been no corona case for 14 days are allowed to leave their homes.

Shops reopened on Wednesday (June 1), public and private transport resumed, albeit with restrictions.

“You can go anywhere with a PCR test that is up to 72 hours old.

Restaurants are still closed, only pickup and sitting outside, but otherwise everything is open," says Ioana Kraft, General Manager of the EU chamber in Shanghai.

However, the PCR test could still become a bottleneck, says Kraft.

Time is running from the moment of collection, but it often takes time before the results are there.

Not everyone made it to the office right away in the city.

But all of a sudden there were people on the streets again, many of them with masks.

"Some just wanted to go to the hairdresser," says Kraft.

"I think whoever is still at home is simply because he or she can't believe it."

China: "Doing everything we can to regain ground lost by the virus outbreak"

Other residents confirm that the streets of Shanghai are packed with people - as if nothing ever happened.

All subways are also running, and people can cross the river between the east and west parts of the city for the first time since the end of March.

However, the new freedoms do not apply to everyone: Neighborhoods that have been identified as risk areas are excluded;

According to Chinese state media, around 200,000 people are also in quarantine.

Kindergartens, elementary and middle schools as well as cinemas and fitness studios will remain closed.

Flight operations are to be gradually resumed at Pudong and Hongqiao International Airports.

Around 100 passenger flights are expected on Wednesday – significantly fewer than the around 1,700 flights that were handled at both airports on an average day last year.

"We will return life and business to normal," the Shanghai Communist Party Committee and the municipal government said in a statement.

"Shanghai will do everything possible to make up the ground lost by the virus outbreak." China has been pursuing a zero-Covid strategy since the beginning of the corona pandemic: just a few positive cases are enough to cordon off neighborhoods or entire cities.

In Shanghai, the restrictions began at the end of March for five days on the east side of the Huangpu River.

But then the lockdown was extended to the entire city.

At the peak of the corona wave, 27,000 new infections were registered in one day;

most recently there were only eleven new cases on Wednesday.

China: Lockdowns put a massive strain on the global economy

However, what sounds like success in fighting the pandemic comes at a high price.

Due to the lockdown, the supply situation for many residents was severely restricted at times, food was scarce, medicines were often delivered late or not at all.

The draconian measures had led to violent protests from citizens, including on social media.

Most of the online protests were quickly censored.

Nevertheless, recordings of clashes between desperate residents and officials kept circulating.

The economy also suffered enormously from the restrictions.

Experts believe it is unlikely that China will be able to achieve its self-imposed target of 5.5 percent economic growth this year due to the lockdown in Shanghai and many other cities.

According to an important economic barometer, activities in China's manufacturing sector contracted for the third month in a row in May – albeit not quite as quickly.

The purchasing managers' index (PMI) of the business

rose slightly to 48.1 points from 46 in the previous month, according to data on Wednesday.

Below the critical mark of 50 points, however, a decline in industrial activity is to be expected.

"The Covid outbreaks in various regions continue to weigh on the economy," he commented

economist Wang Zhe.

"Both the supply of production and demand have continued to decline."

China: Shutdown of Shanghai port affects supply chains

In addition, the factory closures and the significant drop in capacity at the port of Shanghai – the largest in the world – are still having an impact on global supply chains.

German companies are increasingly feeling the effects of this.

In the latest company survey by the Ifo Institute in May, 77.2 percent of companies complained about material shortages and delivery problems, after 75 percent in April.

"The closure of ports in China has further worsened the situation for many companies," said Ifo survey manager Klaus Wohlrabe in Munich on Monday.

The massive disruption in the logistics chain will therefore noticeably delay the economic recovery.

Around half of the companies in the survey said that the lockdowns in China had exacerbated supply problems.

Almost all key industries are badly affected, most of all mechanical engineering,

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As the

writes, many state-owned companies in Shanghai have now called on their employees to go back to work.

Some private companies, on the other hand, would refrain from ordering their employees back to the offices.

The port of Shanghai has been operating at almost full capacity since mid-May.

The port employees had to stay overnight to avoid contact with other people.

Thanks to this "closed loop" system, other companies have recently been able to produce again almost without restrictions.

These include the car manufacturer Tesla, which operates a large plant in Shanghai.

China: No end of zero-Covid policy in sight

Meanwhile, there is no end in sight to the zero-Covid strategy in China, although the highly contagious omicron variant is difficult to control.

Beijing defends its tough policy with reference to the relatively low vaccination rate among older people and the lack of sufficient intensive care beds in the hospitals.

In addition, the zero-tolerance policy is closely linked to head of state and party leader Xi Jinping, who wants to be elected to a third term at a party conference in the fall.

Similar rules to those in Shanghai currently apply in Beijing, where a negative test in the past 48 hours usually has to be proven.

The capital of 21 million inhabitants, which had pursued a soft lockdown, lifted the home office requirement in the largest district of Chaoyang and in Daxing and initially allowed shops to reopen.

Restaurants remain closed.

Strict restrictions continued to apply in the hard-hit Fengtai District.

14 new corona cases were reported in Beijing on Tuesday.