China is on emergency alert as a new virus outbreak approaches to jeopardize territories within the purview of Beijing, including some key cities to the world's suppliers of electronic equipment.
Beijing's Covid Zero Objective Faces a Setback
A significant test for President Xi Jinping's viral strategy will be the recent breakouts. He stated last week that China would continue to adhere to Covid Zero, which relies on lockdowns and frequent mass testing to eradicate infections, and that the nation would prefer to endure a temporary setback in economic development than allow the virus to endanger the security and health of its citizens.
Si county in the eastern province of Anhui has seen an increase in infections. Authorities have reported 287 cases on Sunday, July 3, and roughly 1,000 since late last week. Late last week, in an effort to prevent the virus from spreading to Jiangsu, the area around Si was shut down by authorities. Jiangsu is the second-largest contributor to China's economic output and a significant global manufacturing hub for the solar sector.
But the number of instances is already rising. A biotech powerhouse city called Wuxi reported 35 infections, banned dine-in service at eateries, and shut down entertainment establishments. Concerns about the wider impact throughout the Yangtze River Delta region, which contributes to a fourth of China's economy, have grown as Zhejiang province and Shanghai have also reported patients who tested positive for Covid.
Lockdowns in China Disruptive to International Supply Chain
China's most recent breakouts, including the brutal two-month shutdown of Shanghai that severely disrupted production and tangled international supply networks, are just now beginning to show indications of a developing recovery. Although the most recent outbreak has so far only affected one tiny county, and officials haven't imposed lockdowns in any of the larger regional centers, any tightening of restrictions might have an international impact.
According to BloombergNEF data, Jiangsu Province is home to more than one-third of the world's solar panel production capacity. It is also the world's top manufacturer of solar cells and wafers. The Yangtze River Delta is also a significant producer of semiconductor chips, components for the iPhone and Mac laptops, as well as housing for pharmaceutical companies and e-commerce businesses. After past epidemics, several manufacturers still haven't returned to normal.
In another location, Ningde city in Fujian province discovered 10 new Covid cases and implemented control measures. The largest manufacturer of batteries for electric automobiles, Contemporary Amperex Technology Co., has its headquarters in this city.
Jiangsu's neighbor and financial center reported three local instances on Sunday. After six days of the city reporting no community infections, one was discovered outside of government quarantine. In a briefing on Sunday, Zhao Dandan, a vice-director of Shanghai's municipal health commission, warned that there is still a chance that the number of Covid cases will increase. There were no new cases in Beijing.
China's overall infection rate reached a level last seen in late May, just as Shanghai was set to break its lockdown. One was found outside of the government's quarantine six days after the city reported that there were no community infections. Zhao Dandan, a vice director of Shanghai's municipal health commission, cautioned that there is still a possibility that the number of Covid cases will rise at a briefing on Sunday. On Sunday, there were no brand-new cases in Beijing.
