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China lockdowns: The economic cost of a zero-Covid policy

War. Inflation. And now, Covid lockdown deja vu in China. It is a perfect storm for the global supply chain - how goods and materials get from other countries to you and me.

When disruptions take place in China, it is significant because about a third of the world's entire manufacturing capacity is based in the country.

If you're buying something online there's a very good chance it was made in Shenzhen - a city of 17.5 million in the south east where roughly half of all China's online retail exporters are based.

So, when Shenzhen went into a six-day lockdown on Sunday after a massive surge in Covid cases, it sent shockwaves through the world's businesses. The restrictions have since widened to other major cities and provinces like Shanghai, Jilin and Guangzhou.

Factories had to suspend production, and cities turned into ghost towns.

The number of ships waiting at some Chinese ports has already increased, according to project44 which monitors how freight is moving across the world. "We saw a 28.5% increase in the number of vessels waiting outside of the port of Yantian which is a major export port to Europe and North America," says Adam Compain, senior vice president of project44.


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