China coronavirus: Shanghai restrictions caused ‘more severe economic hit’ than previous lockdowns

Name: Downtown Shanghai remains deserted despite ‘reopening’
Uploaded: 2022-06-01T12:00:31.000Z
Duration: 3 min 36 s
Description: Downtown Shanghai remains deserted despite ‘reopening’

The Yangtze River Delta has been hard hit by Shanghai’s lockdown, as the city is a hub for local supply chains

Most big cities in the region, including Nanjing and Suzhou, saw industrial growth and retail sales decline in April

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Shanghai reopened after two months of lockdown on Wednesday, but the economic effects are still being felt across the Yangtze River Delta. Photo: AFP

Ji Siqi

Published: 8:00pm, 1 Jun 2022Updated: 9:09am, 2 Jun 2022

As Shanghai started to lift its two-month citywide lockdown on Wednesday, a growing number of economic indicators have revealed the damage caused by the draconian containment policy – much of which is being felt beyond the city itself.

The Yangtze River Delta – an economic powerhouse and important gateway for foreign trade – has also been hit hard, as Shanghai is the strategic centre for supply chains and logistics networks in the region, which contributes about a quarter of national economic output.

“The recent Covid-related restrictions in Shanghai and elsewhere have had a significantly more severe economic hit than most prior lockdowns in China,” Louis Kuijs, chief economist for the Asia-Pacific at S&P Global Ratings, said in a note last month.

“The effect on manufacturing output and supply chains has been large.”

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Downtown Shanghai remains deserted despite ‘reopening’

In April, output from Shanghai’s industrial sector was valued at 128.617 billion yuan (US$19.2 billion), a decline of 61.5 per cent compared with the same month last year.

Suzhou, a city known for hi-tech manufacturing that is about 83km away from Shanghai, also recorded a 0.5 per cent year-on-year decline in industrial output in the first four months of this year, a fall of 10.1 percentage points from the first quarter.

Most other big cities in the region – such as Ningbo and Hangzhou – also recorded falling growth rates in the industrial sector in April.