COVID policy is devastating Chinese industry – It is also hurting their economic outlook. However, most other economies around the globe have rebounded in the wake of the pandemic.
As a result, many Chinese businesses have been forced to close their doors, leaving millions of workers unemployed. The situation is not expected to improve anytime soon, as the COVID policy is not changing as the severity of the disease has decreased. The seemingly endless cycle of shutdowns is bad news for China’s economy, which is already struggling to recover from the pandemic.
Zero COVID policy
China has long been known as a manufacturing powerhouse, supplying the world with everything from clothes to electronics. But the COVID pandemic has put a stop to that.
In an effort to contain the spread of the disease, the Chinese government has implemented a series of strict lockdown measures. These have been devastating to China’s economy, with businesses forced to close their doors and workers left unemployed.
This “zero COVID” policy has been successful in preventing any large outbreaks, but it comes at a high cost.
In Shanghai, lockdowns were put back into place just days after being lifted. Citizens are losing patience with the Chinese government, but there is little they can do. The strict lockdowns require constant testing. They also restricted citizens from leaving their home unless they were experiencing a medical emergency.
Economic impact – COVID policy is devastating Chinese industry
Many companies that once relied on China for manufacturing are looking elsewhere. This is likely to make things worse for the Chinese. Major players like Apple are looking outside of China.
They have specifically cited China’s lockdown policies as a driving factor for leaving.
Even before the pandemic, China was looking less and less appealing to some companies. The country’s labor costs have been rising, and there are concerns about intellectual property theft. The pandemic has only made things worse, with businesses fleeing the country in search of greener pastures.
Are they on the verge of a massive manufacturing exodus? Many companies are looking to leave China in search of cheaper labor and fewer restrictions.
Likely to rebound, eventually
China will probably come back from this in the long run, but it may take some time. Right now, draconian measures are holding them back. It doesn’t look like the Chinese government is willing to make necessary changes just yet.
However, they still have a massive population that they need to feed. The only way forward for them again is to get back to work. They may have to make some concessions in order to lure companies back as well.
In the meantime, other economies are benefiting from China’s misfortune. Countries like Vietnam, Mexico, and Bangladesh are seeing an influx of businesses looking to set up shop. They offer cheap labor costs and fewer restrictions. This is bad news for China in the short term, but it may be just what they need to get back on track.
Only time will tell how this plays out.