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China’s Economic Data Hints at Cost of Zero Covid Strategy

edited April 18 in Other Investing
Free Link to NY Times Article

Some thoughts from the article:

• The country’s lockdowns have trapped truck drivers on highways, halted production lines and forced some importers to source goods from outside China.

• Official data released on Monday show they are exacting a grim toll on the world’s second-largest economy.

• For the world, China’s Covid shutdowns could feed inflation by further disrupting the supply chains that many manufacturers rely on.

• Executives in the auto industry and tech sector, two of China’s biggest employers, have begun warning in recent days of crippling disruption to their nationwide operations if Shanghai, in particular, cannot reopen soon.

• As China keeps disrupting production by imposing stringent lockdowns with no warning, at least a few importers in the West are starting to look elsewhere for supplies.
Additional, from The Economist, 4/18:
• Unemployment in China rose to its highest level since early in the pandemic, while consumer spending in the country fell. Official data show that the jobless rate climbed to 5.8% in March and retail sales fell by 3.5% compared with a year ago. GDP grew in the first quarter, though the full impact of recent lockdowns may not yet be being felt.

• The zero-covid policy has become a dead end from which the Communist Party has no quick exit.

• In addition to Shanghai, five provinces have partial lockdowns. At least 150m people are affected. There is no exit strategy.


And also this, from a current article in The Guardian, 4/18:
“If Shanghai cannot resume production by May, all of the tech and industrial players who have supply chains in the area will come to a complete halt, especially the automotive industry,” Richard Yu Chengdong, head of Huawei’s consumer and auto division said in a WeChat post. “That will pose severe consequences and massive losses for the whole industry.”

Comments

  • Scary what's going on over there. China ain't the place to be.
  • Situation is worse than that of Wuhan back in 2020. Several large industrial cities are being affected and production for Tesla and Foxconn have stopped as OJ posted above.

    The worst is the Chinese vaccines are barely passing the WHO benchmark with low 50% effective against COVID versus Pfizer/Moderna vaccines (90+% effective). It is nearly impossible now to buy the large number of western vaccine dosages. China’s GDP number will be considerable lowered this year.
  • Does anyone know if China pretty much depends on it's own version of a Covid vaccine(s) or have they adopted/allowed others? ISTM that I have read reports that the ones they were using were only in the 50-55% effectiveness range but I can't confirm that.
  • @Mark- From my reading I believe that China has refused to use "Western" vaccines for the most part. They are evidently using Chinese vaccines, at least for the general population, and those have indeed been reported to be in the 50-55% effectiveness range.
  • Thanks @OJ. Que sera I guess.
  • Given that they copy every thing, why would there be a false pride in using / copying western vaccines?

    My wild guess is that lock downs may have little to do with vaccines and more to do with the inherent social inefficiency of a one party rule (all perceived wrongs, even bad luck, is attributed to that one party and social unrest is a distinct possibility) and may be China has a population growth problem that is bigger than what the CCP lets on.
  • BaluBalu said:

    Given that they copy every thing, why would there be a false pride in using / copying western vaccines?

    My wild guess is that lock downs may have little to do with vaccines and more to do with the inherent social inefficiency of a one party rule (all perceived wrongs, even bad luck, is attributed to that one party and social unrest is a distinct possibility) and may be China has a population growth problem that is bigger than what the CCP lets on.

    That's the point. Forget the vaccine stuff. It's all about power. They're throwing healthy people out of their homes for covid people quarantine sites. Police in haz mat suits. Scary, All the lockdowns and masks and the rates are still skyrocketing. What's that tell ya? And they are the origin of a genocide that we haven't seen the likes of Hitler.
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