Shanghai's Biggest Covid Lockdown Comes With Repercussions In China's Financial Hub

China's economic growth already slowing, the extreme measures are seen as worsening difficulties hitting employment, consumption and even global supply chains.

New Delhi: Shanghai is China's financial capital which went under a lockdown on Monday, just like in any other country this will come with its own repercussions. The city is home to about 26 million people and it had managed its smaller previous outbreaks with limited lockdowns of housing compounds and workplaces where the virus was spreading.

On Monday, when it began one of the most extensive lockdowns in two years, questions arose about the economic toll of the nation's zero-Covid strategy, according to an AP report.

Shanghai's Disneyland theme park is among the businesses that closed earlier. Automaker Tesla is also suspending production at its Shanghai plant, according to media reports.

Some workers, including traders at the city's stock market, were preparing to stay within a "Covid-19 bubble" for the duration of the lockdown.

Li Jiamin, 31, who works in the finance industry, said she had packed several days of clothing and supplies, and her company was sorting out sleeping and eating arrangements. "The overall impact is still great," Li told The Associated Press, pointing especially to losses suffered by workers in the informal sector who have no such support.

With China's economic growth already slowing, the extreme measures are seen as worsening difficulties hitting employment, consumption and even global supply chains. With a 21-day curfew in place for all foreigners arriving from abroad, travel between China and other countries has fallen dramatically.

According to a Bloomberg report, the effect of the lockdown may shave up to 0.4 percentage points from China’s economic growth in the first and second quarter, compared to a year ago, estimates Liu Peiqian, a China economist at NatWest Group Plc.

Shanghai which has the largest port in the world and is a major trade hub as well, the second richest city in the country contributes 3.8% to the country’s Bloomberg quoted the National Bureau of Statistics. 

On Friday, the International Air Transport Association announced it was moving its annual general meeting from Shanghai to Doha, citing continuing Covid-19 related restrictions on travel to China.

Shanghai's Pudong financial district and nearby areas will be locked down from Monday to Friday as mass testing gets underway, the local government said. In the second phase of the lockdown, the vast downtown area west of the Huangpu River that divides the city will start its own five-day lockdown Friday.

According to the AP report, panic-buying was reported on Sunday, with supermarket shelves cleared of food, beverages and household items. Additional barriers were being erected in neighbourhoods Monday, with workers in hazmat suits staffing checkpoints.

In-person observations of the April 5 Tomb Sweeping Festival have been cancelled and memorials will instead be held online.