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In Shanghai, COVID instances have slightly decreased as a result of the economy

Shanghai saw a slight drop in new cases on Friday as lockdowns in the commercial city at the center of China’s COVID-19 outbreak, combined with restrictions elsewhere, threaten to weigh on the world’s second-largest economy even more. China’s efforts to stem the virus with a draconian “zero COVID” policy are causing economic turmoil that is sweeping global supply chains for goods from electric cars to iPhones. Electric car maker Xpeng and tech giant Huawei have warned of an impending industry-wide lockdown moratorium if suppliers in and around Shanghai are unable to resume work.

Richard Yu, chief executive of both Huawei’s consumer business group and smart car division, echoed his sentiments in private comments seen by the company, adding that the industry is facing heavy losses. Shipments of some Apple products and laptops from Dell and Lenovo could also be delayed, analysts say. On Friday, the Ministry of Transport announced a national passport system that will allow freight vehicles to travel between high-risk zones without delay, as long as the driver has a normal temperature and has tested negative for the virus within 48 hours.

Airlines and real estate have also suffered. Shanghai’s 23,000 infections on Friday were down from more than 27,000 the day before, but included a record 3,200 symptomatic cases from 2,573 the day before. Xpeng CEO He Xiaopeng has issued a strong warning to the industry unless the situation improves. “If suppliers in and around Shanghai can’t find a way to resume operations and production, all Chinese automakers may have to halt production in May,” he said on the social media app Wechat.

An April 7 study by Gavekal Dragonomics found that 87 of China’s top 100 gross domestic product cities have imposed some form of quarantine restrictions. Covid-19 restrictions have also affected travel across the country, with state-owned airline Air China reporting a 70% year-on-year drop in traffic in March. Home prices in 70 major Chinese cities stalled for the second straight month last month, official data showed Friday.

The city has turned the apartment into a quarantine center, which has sparked protests from angry neighbors worried about the high risk of infection.

The State Council or Cabinet said on Wednesday that more policy measures were needed to support the economy, but analysts were unsure if a rate cut would soon reverse the recession while the government stuck to its COVID policies. Some detainees in Shanghai have taken to social media to vent their frustrations about food difficulties and poor conditions at the central quarantine facility. Most of the stores in Shanghai were closed, but a few had their shutters half-open, delivering goods to waiting for delivery drivers.

News Summary:

  • In Shanghai, COVID instances have slightly decreased as a result of the economy
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