Shanghai, home to China’s leading financial center and some of its largest sea and airports, has been under lockdown for more than two weeks with no sign of ending. China’s unwavering commitment to its “Zero-Tolerance” Covid-19 policy threatens to deal a hefty blow to its economy while placing further stain on global supply chains and fuel inflation. Meanwhile, port delays are worsening while air and freight rates soar, putting further pressure on global trade. While President Xi Jinping has promised to “minimize” the economic impact of his severe Covid policy, serious concern from other countries raises tough questions about the effectiveness of Beijing’s approach to Omicron outbreaks. “The economic costs could be staggering,” wrote Ting Lu, managing director and chief China economist for Nomura, in a note published in the second week of lockdowns. Lu added that global investors may be “underestimating” the impact of China’s zero-Covid policy on its economy and the markets. An article published by CNN closer examines the depths to which the China lockdowns impact.
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