by Brayden Yee
China’s strict pandemic policies dubbed the “zero-COVID policy” have sent the world market into a panic. A top executive at Huawei stated that it may cause a huge loss for the tech industry, which will endanger China’s economy and the International market as a whole. In a WeChat post, Richard Yu Chengdong, the head of Huawei’s consumer and auto division stated that the Zero-COVID Policy poses severe consequences and massive losses for the industry.
The conflict with Huawei, one of the juggernauts of China’s tech industry shows the underlying conflict of tensions rising due to China attempting to eliminate COVID by locking up Shanghai. As the world's largest container port, many have warned that the lockdown will have huge repercussions, not only on China, but on the whole continent, and even the international economy as a whole.
The plan by Chinese President Xi Jinping has been heavily criticized, due to the strict lockdown in place even though the COVID numbers continue to rise. Xi Jinping reaffirmed the policy, stating that officials should not ease up on pandemic prevention work.
Economists have warned that the continued lockdown, if it goes on for the remainder of April, will cost the city a 6% loss of GDP, a total of 2% for the whole country. This would in turn lead to China’s economic growth aim shrinking from 5.5% to 4.6% according to the chief economist at Dutch bank ING, Iris Pang. China has also been warned that further lockdowns of other major cities can decrease the national GDP by up to 4%, and will lead to many spillover effects lowering it even further. The lowering of manufacturing in China has been an ongoing issue, with mobility in February of 2020 being 66%, and completely going down in 29 provinces.
The effects of the lock down have also been seen in parts of the international market, with shares of items highly manufactured in China, such as cars and semiconductors going down drastically. Pegatron, a major iPhone maker, has also paused making in Shanghai, and nearby Kunshan, likely as a result of the impending economic limitations due to lockdowns.
The zero-COVIC policy has resulted in much more controversy for China, especially in relation to economics, with the criticism faced for his policy, President Xi Jinping must prioritize stomping out the pandemic for good or letting the economy of China grow.
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